Midwestern University, never a football powerhouse, has only won a total of 12 football games in the past four years. Because of this, and the University's heavy emphasis on basketball, football attendance currently averages only 50% of the stadium's capacity of 52,180 seats.
At the beginning of the year, Midwestern University's associate athletic director prepared the following master budget for football.
Football Master Budget
Sales (seats per game) 26,000
Number of home games 6
Average ticket price (per seat, per game) $25
Variable cost (per seat, per game) $ 5
Fixed costs (for the season) $2,000,000
During the summer, the athletic directed wondered if there might be a way to put more "bodies in the stadium." To boost attendance, the athletic director decided to reduce the average ticket price by $6 per seat. Indeed, as shown in the actual results in the accompanying table, the athletic director's decision increased average home attendance by 15,000 per game.
Football Actual Results
Sales (seats per game) 41,000
Number of home games 6
Average ticket price (per seat, per game) $19
Variable cost (per seat, per game) $ 5
Fixed costs (for the season) $2,000,000
Everyone in the Athletic Department was excited by these numbers.
a. What was Midwestern University's total profit variance for football?
b. Calculate Midwestern University's football sales volume variance and football sales price variance.
c. Comment on Midwestern University's football performance for the most recent year.