Afos Sofas Inc. produces two models of sofas: Standard and Deluxe. Budget and actual data are as follows.

The expected total market sales of sofas were 250,000 sofas. The actual total market sales of sofas were 220,000 sofas.
REQUIRED
A. Calculate the sales quantity variance.
B. Calculate the industry volume variance.
C. Explain why the budgeted operating income for Afos Sofas Inc. was less than expected?

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Budget Actual StandardDeluxe $425 $850 Selling price per unit Variable costs per unit Sales volume in units Standard $400 $260 4,000 Deluxe $900 $670 6,000 $275 $685 6,800 4,200 Master Budget Actual Sales revenue Variable costs Contribution margin Fixed costs Operating income $7,000,000 $6,460,000 4.747,000 1,713,000 938,500 774500 5,060,000 1,940,000 $1,072,500