Question

Please include explanations

The Greensboro Performing Arts Center (GPAC) has a total capacity of 7,600 seats: 2,000 center seats, 2,500 side seats, and 3,100 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 are 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. (Round your answers to 4 decimal places. (i.e. .123456 = 12.3456%)) 2. The budgeted average contribution margin per seat. Assume the ticket price is also the contribution margin. (Round your answer to 4 decimal places.)        3-a. The total sales mix variance. (Round your answers to the nearest whole dollar amount.)        3-b. The total sales quantity variance. (Round your answers to the nearest whole dollar amount.)        4. The total sales volume variance.

Answer 1

1) Budgetes and Actual sales mix Percentage for different types of seats :-

	Budgeted Sales Qty.	Budgeted Sales Mix	Actual Sales Qty.	Actual Sales Mix
Center	2000*90% =1800	1800/6435 =27.97%	2000*95% =1900	1900/6350 =29.92%
Side	2500*80% = 2000	2000/6435 =31.08%	2500*85% =2125	2125/6350 =33.47%
Balcony	3100*85% = 2635	2635/6435 =40.95%	3100*75% =2325	2325/6350 =36.61%
Total	6435		6350

2) Budgeted Avg. Contribution margin per seat :-

= (Budgeted Sales * Ticket Price) / Total No. of Seats

= ((1800*$90) + (2000*$80) + (2635*$70)) / 6435

= ($162000 + $160000 + $184450) / 6435

= $506450 / 6435

= $78.7

3a) Total Sales mix Variance :-

= (Actual Quantity sold - Total Actual Quantity sold in Standard mix) * Contribution per seat

Total Actual Quantity sold in standard mix :-

Center = 6350*27.97% = 1776 seats

Side = 6350*31.08% = 1974 seats

Balcony = 6350*40.95% = 2600 seats

Center	(1900-1776)*$90	$11160
Side	(2125-1974)*$80	$12080
Balcony	(2325-2600)*$70	($19250)
Total		3990 F

3b) Total Sales Quantity Variance :-

= (Actual Sales Volume in Standard mix - Budgeted Sales) * Contribution per seat

Center	(1776-1800)*$90	($2160)
Side	(1974-2000)*$80	($2080)
Balcony	(2600-2635)*$70	($2450)
Total		6690 U

4) Total Sales Volume Variance ;-

= (Actual Sales - Budgeted Sales) * Contribution Per Seat

Center	(1900-1800)*$90	$9000
Side	(2125-2000)*$80	$10000
Balcony	(2325-2635)*$70	($21700)
Total		2700 U