Slumber Cozy Inc. produces two models of beds: Regular and Majestic. Budget and actual data are as follows.

The expected total market sales were 500,000 beds. The actual total market sales were 666,667 beds.
REQUIRED
A. Calculate the sales quantity variance.
B. Calculate the industry volume variance.
C. Explain why the budgeted operating income for Slumber Cozy Inc. was less than expected?

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Budget Actual Regular Selling price per unit Variable costs per unit Sales volume in units $300 $220 4,500 Majestic $800 $590 5,500 Regular Majestic $325 $238 7,200 $700 $583 4,800 Sales revenue Variable costs Contribution margin Fixed costs Operating income Master Budget $5,750,000 4,235,000 1,515,000 Actual $5,700,000 4,512000 I , 188,000 882,500 32,500 268.500 919,500