The Adelaide Hares play in the Australian Cricket League. The Hares play in the Bogga Arena, which
Question:
The Adelaide Hares play in the Australian Cricket League. The Hares play in the Bogga Arena, which is owned and managed by the City of Adelaide. The arena has a capacity of 17,500 seats (6,500 lower-tier seats and 11,000 upper-tier seats). The arena charges the Hares a per-ticket charge for use of its facility. All tickets are sold by the Reservation Network, which charges the Hares a reservation fee per ticket. The Hares’ budgeted contribution margin for each type of ticket in 2017 is computed as follows:
The budgeted and actual average attendance figures per game in the 2017 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 Hares 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 Adelaide Hares in 2017.
(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 2017.
3. Present a summary of the variances in requirements 1 and 2. Comment on the results.
Step by Step Answer:
Horngrens Cost Accounting A Managerial Emphasis
ISBN: 9781292211541
16th Global Edition
Authors: Srikant Datar, Madhav Rajan