The Chicago Hawks play in the American Ice Hockey League.

The Hawks play in the Downtown Arena, which is owned and managed by the City of Chicago. The arena has a capacity of 17,500 seats (6,000 lower-tier seats and 11,500 upper-tier seats). The arena charges the Hawks a per-ticket charge for use of its facility. All tickets are sold by the Reservation Network, which charges the Hawks a reservation fee per ticket. The Hawks' budgeted contribution margin for each type of ticket in 2020 is computed as follows:

Lower-Tier TicketsUpper-Tier TicketsSelling price$39$17Downtown Arena fee85Reservation Network fee42Contribution margin per ticket$27$10

There was no difference between the budgeted and actual contribution margin for lower-tier or upper-tier seats. The manager of the Hawks was unhappy that actual attendance was 20% below budgeted attendance per game, especially given the booming state of the local economy in the past 6 months.

1.

Compute the sales-volume variance for each type of ticket and in total for the Chicago Hawks in 2020.

(Calculate all variances in terms of contribution margins.)

2.Compute the sales-quantity and sales-mix variances for each type of ticket and in total in 2020.3.Comment on the variance results from requirements 1 and 2.

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