Garden Inc. manufactures and sells small garden sets. The company currently manufactures and sells three models: Standard, Comfortable, and Deluxe. For the 2020 financial year, the budgeted average selling price per set was: $30 for the standard set, $45 for the comfortable set, and $60 for the deluxe set. The standard material cost per set consists of four square feet of plastic at a purchased price of $3 per square foot. The standard labor cost per set consists of 1.2 labor hour at a rate of $10 per labor hour. The fixed costs for both manufacturing and selling & administrative activities were budgeted at $537 000. For the 2020 financial year, the budgeted sales were

30 000 standard sets, 18 000 comfortable sets, and 12 000 deluxe sets. Garden Inc. estimated to obtain 4% of the industry volume for the 2020 financial year.

Garden Inc. actual results for the 2020 financial year were the following:

Sales
Standard		42 250 sets		$1,394,250
Comfortable		13 000 sets		$572,000
Deluxe		9 750 sets		$604,500
				$2,570,750
Variable costs
Material		277 000 square feet		$836,000
Labor		92 000 labor hours		$947,000
Fixed costs				$534,000
Operating income				$253,750

The actual industry volume for the financial year 2020 was 1 700 000 garden sets.

Required: You must provide all the detailed supporting calculations.

b. Reconcile Garden Inc. budgeted operating income in 2020 to the actual operating income in 2020 by computing all relevant variances for 2020. (20 marks)