The Detroit Penguins play in the American Ice Hockey League. The Penguins play in the Downtown Arena

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The Detroit Penguins play in the American Ice Hockey League. The Penguins play in the Downtown Arena (owned and managed by the City of Detroit), which has a capacity of 15,000 seats (5,000 lower-tier seats and 10,000 upper-tier seats). The Downtown Arena charges the Penguins a per-ticket charge for use of their facility. All tickets are sold by the Reservation Network, which charges the Penguins a reservation fee per ticket. The Penguins' budgeted contribution margin for each type of ticket in 2007 is computed as follows:
The Detroit Penguins play in the American Ice Hockey League.

The budgeted and actual average attendance figures per game in the 2007 season are:

The Detroit Penguins play in the American Ice Hockey League.

There was no difference between the budgeted and actual contribution margin for lower-tier or upper-tier seats.
The manager of the Penguins was delighted that actual attendance was 10% above budgeted attendance per game, especially given the depressed 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 Detroit Penguins in 2007. Required (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 2007.
3. Present a summary of the variances in requirements 1 and 2. Comment on the results?

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Cost Accounting A Managerial Emphasis

ISBN: 978-0131495388

12th edition

Authors: Charles T. Horngren, Srikant M. Datar, George Foster

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