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# CHAPTER 14 - page 15 / 62

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14-22 (Cont'd.)

##### Solution Exhibit 14-22

Columnar Presentation of Sales-Volume, Sales-Quantity and Sales-Mix Variances for Detroit Penguins

Flexible Budget:

Actual Units of

× Actual Sales Mix

× Budgeted Contribution

Margin per Unit

(1)

Actual Units of

× Budgeted Sales Mix

× Budgeted Contribution Margin per Unit

(2)

Static Budget:

Budgeted Units of

× Budgeted Sales Mix

× Budgeted Contribution

Margin per Unit

(3)

Panel A:

Lower-tier

(11,000 × 0.30a) × \$20

3,300 × \$20

(11,000 × 0.40b) × \$20

4,400 × \$20

(10,000 × 0.40b) × \$20

4,000 × \$20

\$66,000\$88,000\$80,000

\$22,000U\$8,000 F

Sales-mix varianceSales-quantity variance

\$14,000 U

Sales-volume variance

Panel B:

Upper-tier

(11,000 × 0.70c) × \$5

7,700 × \$5

(11,000 × 0.60d) × \$5

6,600 × \$5

(10,000 × 0.60d) × \$5

6,000 × \$5

\$38,500\$33,000\$30,000

\$5,500 F\$3,000 F

Sales-mix varianceSales-quantity variance

\$8,500 F

Sales-volume variance

Panel C:

All Tickets

(Sum of Lower-tier and Upper-tier tickets)

\$104,500e\$121,000f\$110,000g

\$16,500 U\$11,000 F

Total sales-mix varianceTotal sales-quantity variance

\$5,500 U

Total sales-volume variance

F = favorable effect on operating income;  U = unfavorable effect on operating income.

Actual Sales Mix:

aLower-tier=3,300 ÷ 11,000=30%

cUpper-tier=7,700 ÷ 11,000=70%

e\$66,000 + 38,500 = \$104,500

Budgeted Sales Mix:

bLower-tier= 4,000 ÷ 10,000= 40%

dUpper-tier=6,000 ÷ 10,000= 60%

f \$88,000 + \$33,000 = \$121,000

g \$80,000 + \$30,000 = \$110,000

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