Variance analysis, multiple products. The Chicago Tigers play in the American Ice Hockey League. The Tigers play in the Downtown Arena, which is owned and managed by the City of Chicago. The arena has a capac- ity of 15,000 seats (5,500 lower-tier seats and 9,500 upper-tier seats). The arena charges the Tigers a per-ticket charge for use of its facility. All tickets are sold by the Reservation Network, which charges the Tigers a reserva- tion fee per ticket. The Tigers' budgeted contribution margin for each type of ticket in 2017 is computed as follows: Lower-Tier Tickets Upper-Tier Tickets $18 Selling price $33 Downtown Arena fee Reservation Network fee 4 5 Contribution margin per ticket $20 The budgeted and actual average attendance figures per game in the 2017 season are as follows: Budgeted Seats Sold Actual Seats Sold Lower tier 4,500 3,300 Upper tier Total 7,700 5,500 10,000 11,000 There was no difference between the budgeted and actual contribution margin for lower-tier or upper-tier seats. The manager of the Tigers 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.

Variance analysis, multiple products. The Chicago Tigers play in the American Ice Hockey League. The Tigers play in the Downtown Arena, which is owned and managed by the City of Chicago. The arena has a capac- ity of 15,000 seats (5,500 lower-tier seats and 9,500 upper-tier seats). The arena charges the Tigers a per-ticket charge for use of its facility. All tickets are sold by the Reservation Network, which charges the Tigers a reserva- tion fee per ticket. The Tigers' budgeted contribution margin for each type of ticket in 2017 is computed as follows: Lower-Tier Tickets Upper-Tier Tickets $18 Selling price $33 Downtown Arena fee Reservation Network fee 4 5 Contribution margin per ticket $20 The budgeted and actual average attendance figures per game in the 2017 season are as follows: Budgeted Seats Sold Actual Seats Sold Lower tier 4,500 3,300 Upper tier Total 7,700 5,500 10,000 11,000 There was no difference between the budgeted and actual contribution margin for lower-tier or upper-tier seats. The manager of the Tigers 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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