Question

The Greensboro Performing Arts Center (GPAC) has a total capacity of 8,000 seats: 2,100 center seats, 2,600 side seats, and 3,300 balcony seats. The budgeted and actual tickets sold for a Broadway musical show are as follows:

				Percentage Occupied
	Ticket Price			Budgeted Seats			Actual Seats
Center	$	90			90	%		95	%
Side		80			80			85
Balcony		70			85			75

The actual ticket prices were the same as those budgeted. Once a show has been booked, the total cost does not vary with the total attendance.

Required:

Compute the following for the show:

1. The budgeted and actual sales mix percentages for different types of seats.

2. The budgeted average contribution margin per seat. Assume the ticket price is also the contribution margin.

3-a. The total sales mix variance.

3-b. The total sales quantity variance.

4. The total sales volume variance.

1.                                       Budgeted Sales Mix                          Actual Sales Mix

Center                                                                %                                                     %

Side                                                                   %                                                     %

Balcony                                                             %                                                      %

2. Budgeted average contribution margin per seat?-------------

3-a                        Sales Mix Variance

   Center     ----------------     --------------------

   Side        ----------------     --------------------

   Balcony   ----------------     --------------------

   Total        ----------------     --------------------

3-b

                             Sales Quantity variance

Center    -------------------      ----------------------

Side       -------------------      ----------------------

Balcony -------------------     ---------------------

Total        -------------------     ---------------------

4.

                        Sales Volume Variance

Center     -------------------     ---------------------

Side        ---------------------     -------------------

Balcony    --------------------     -------------------

Total         -------------------      --------------------

Answer 1

1) Calculation of Budgeted and Actual Sales Mix % (Amounts in $)

	Seat Capacity (A)	Budgeted Seats (%) (B)	Budgeted Seats (A*B)	Budgeted Sales Mix (%)	Actual Seats (%) (C)	Actual Seats (A*C)	Actual Sales Mix (%)
Center	2,100	90%	1,890	27.8967% (1,890/6,775*100)	95%	1,995	29.8653% (1,995/6,680*100)
Side	2,600	80%	2,080	30.7011% (2,080/6,775*100)	85%	2,210	33.0838%(2,210/6,680*100)
Balcony	3,300	85%	2,805	41.4022% (2,805/6,775*100)	75%	2,475	37.0509% (2,475/6,680*100)
Total	8,000		6,775	100.0000%		6,680	100.0000%

2) Calculation of Budgeted Average Contribution Margin per Seat (Amounts in $)

	Budgeted Seats (a)	Ticket Price (b)	Total Contribution Margin (a*b)	Budgeted Avg CM per seat
Center	1,890	90	170,100
Side	2,080	80	166,400
Balcony	2,805	70	196,350
Total	6,775 (i)		532,850 (ii)	78.6494 (ii/i)

Therefore budgeted average contribution margin per seat is $78.6494 per seat.

3-a) Calculation of Sales Mix Variance (Amounts in $)

	Actual Sales Mix % (A)	Budgeted Sales Mix % (B)	Difference (C = A-B)	Total Actual Seats (D)	Ticket Price (E)	Sales Mix Variance (C*D*E)
Center	29.8653%	27.8967%	1.9686%	6,680	$90	11,835 F
Side	33.0838%	30.7011%	2.3827%	6,680	$80	12,733 F
Balcony	37.0509%	41.4022%	-4.3513%	6,680	$70	20,347 A
Total	100.0000%	100.0000%				4,221 F

Therefore total sales mix variance $4,221 Favorable (F).

3-b) Calculation of Sales Quantity Variance (Amounts in $)

	Actual Sales (in Budgeted Mix %) (i)	Budgeted Seats (ii)	Difference (iii = i-ii)	Ticket Price (iv)	Sales Qty Variance (iii*iv)
Center	1,863 (6,680*27.8967%)	1,890	-27	$90	2,430 A
Side	2,051 (6,680*30.7011%)	2,080	-29	$80	2,320 A
Balcony	2,766 (6,680*41.4022%)	2,805	-39	$70	2,730 A
Total	6,680	6,775			7,480 A

Therefore total sales quantity variance is $7,480 Adverse (A).

4) Calculation of Sales Volume Variance (Amounts in $)

	Sales Mix Variance (a)	Sales Qty Variance (b)	Sales Volume Variance (a+b)
Center	11,835 F	2,430 A	9,405 F
Side	12,733 F	2,320 A	10,413 F
Balcony	20,347 A	2,730 A	23,077 A
Total	4,221 F	7,480 A	3,259 A