Rest Easy produces two types of mattresses: Regular and Heavenly. Budgeted and actual data for 2018 were as follows:

Market Data for 2019:

Expected total market unit sales of mattresses: Regular 300,000; Heavenly 200,000 Actual total market sales of beds: Regular 444,444; Heavenly 222,223

Required:

1. Calculate the following variances:

a. Sales price.

b. Market volume.

c. Market share.

d. Sales mix.

e. Sales quantity.

2. During 2019, Big Sleep, one of Rest Easy's key competitors, introduced an aggressive new marketing campaign that included online advertising. Big Sleep also reduced prices on its mattress that competes directly with Rest Easy's Heavenly model. Management at Rest Easy decided to follow suit by reducing the price on the Heavenly model but decided against changing the marketing approach. Using any of the variances that you believe are relevant from (I) above, evaluate the decisions made by Rest Easy·s managers regarding the Heavenly model.

Transcribed Image Text:

Master Budget Actual Regular Heavenly Regular Heavenly Price per unit.. Variable costs per unit. Unit sales.. $ 300 $ 220 $ 800 $ 590 $ 325 $ 238 $ 700 $ 583 4,500 5,500 7,200 4,800