Question

The Chicago Wolves play in the American Ice Hockey League. The Wolves play in the Downtown Arena, which is owned and managed by the City of Chicago. The arena has a capacity of 17,500 seats (6,500 lower-tier seats and 11,000 upper-tier seats). The arena charges the Wolves a per-ticket charge for use of its facility. All tickets are sold by the Reservation Network, which charges the Wolves a reservation fee per ticket. The Wolves’ budgeted contribution margin for each type of ticket in 2013 is computed as follows:


The budgeted and actual average attendance figures per game in the 2013 season are as follows:


There was no difference between the budgeted and actual contribution margin for lower-tier or upper-tier seats. The manager of the Wolves was unhappy that actual attendance was 20% below budgeted attendance per game, especially given the booming state of the local economy in the past six months.
1. Compute the sales-volume variance for each type of ticket and in total for the Chicago Wolves in 2013. (Calculate all variances in terms of contribution margins.)
2. Compute the sales-quantity and sales-mix variances for each type of ticket and in total in 2013.
3. Present a summary of the variances in requirements 1 and 2. Comment on theresults.


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  • CreatedMay 14, 2014
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