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.

  • CreatedMay 14, 2014
  • Files Included
Post your question