Question

The Greensboro Performing Arts Center (GPAC) has a total capacity of 8,600 seats: 2,400 center seats, 2,900 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	$	85			90	%		95	%
Side		75			80			85
Balcony		65			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:

3-a. The total sales mix variance.

3-b. The total sales quantity variance.

4. The total sales volume variance.

Answer 1

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	31.5789	29.6499	1.929%	7220	$85	11,838 F
Side	33.1412	31.8462	1.295%	7220	$75	7012 F
Balcony	34.2797	38.5037	-4.224%	7220	$65	22873 A
Total	100.0000%	100.0000%				4,023 A

Therefore total sales mix variance $4,023 Adverse

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	2141 (7220*29.6499%)	2160	-19	$85	1615 A
Side	2,299 (7220*31.8462 %)	2,320	-21	$75	1575 A
Balcony	2,780 (7220*38.5037 %)	2,805	-25	$65	1625 A
Total	7220	7285			4815 A

Therefore total sales quantity variance is $4815 Adverse (A).

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

	Sales Mix Variance (a)	Sales Qty Variance (b)	Sales Volume Variance (a+b)
Center	11,838 F	1615 A	10223 F
Side	7012 F	1575 A	5437 F
Balcony	22873 A	1625 A	24498 A
Total	4,023 A	4815 A	8838 A

Working notes:-

	Seat Capacity (A)	Budgeted Seats (%) (B)	Budgeted Seats (A*B)	Budgeted Sales Mix (%)	Actual Seats (%) (C)	Actual Seats (A*C)	Actual Sales Mix (%)
Center	2,400	90%	2160	29.6499 (2160/7285*100)	95%	2280	31.5789 (2280/7220*100)
Side	2,900	80%	2,320	31.8462 (2,320/7285*100)	85%	2,465	33.1412 (2,465/7220*100)
Balcony	3,300	85%	2,805	38.5037 (2,805/7285*100)	75%	2,475	34.2797 (2,475/720*100)
Total	8,600		7285	100.0000%		7220	100.0000%

Note: There might be difference in answer by +- 1 cent due to rounding off.