DOA Alive is a group of aspiring musicians and actors who perform in theaters and dinner clubs.

Question:

DOA Alive is a group of aspiring musicians and actors who perform in theaters and dinner clubs. It has a matinee and evening show. These operating data pertain to the month of July:

Master budget data

Total operating income ...........$10,000

Total monthly fixed cost ...........$39,200

Total number of shows ........... 100

Contribution margin per show: Matinee ..... $ 240

Evening ..... $ 600

Actual operating results

Total sales quantity variance ........$ 4,920U

The actual matinees were 150 percent of the evening shows.

Required

1. Calculate for each type of show and the total:

a. Sales mix variances.

b. Sales quantity variances.

c. Sales volume variances.

2. What strategic implications can you draw from the variances?

Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...