Garnets Gym is a fitness and aerobic center located in Atlanta, Georgia. The following table reports Garnets

Garnet’s Gym is a fitness and aerobic center located in Atlanta, Georgia. The following table reports Garnet’s master budget and actual results for the most recent year:

With regard to the discrepancies between the budgeted and actual membership fee and the budgeted and actual number of members, the owners of Garnet’s Gym inform you that in early January they decided to raise the membership fee from $500 to $550. The owners believed that such an action would only reduce membership by 500 rather than 1,000, as actually occurred.

Required:

a. What was Garnet’s total profit variance for the most recent year?

b. Calculate Garnet’s sales volume variance and sales price variance for the most recent year. Did raising the membership fee turn out to be a good idea?

c. Would raising the membership fee have been a good idea if membership decreased by 500 (as predicted) rather than1,000?

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Master Budget Actual Results Membership fee (per member) Number of members $550 4,000 $200 $1,200,000 $1,200,000 $500 5,000 $200 Variable cost (per member) Fixed costs