Part way through the production process it is discovered that the cost assignment was inaccurate for product A and that there has been an underestimation of $150 per unit. They are unable to change the pricing because of contractual obligations.

What is the impact of this error in cost assignment if sales were as predicted?

this is part one of the question

A furniture manufacturer predicts that they will sell 12,000 of product A and 8,000 of product B in the next financial period. They prepare their budget accordingly.

At the end of the financial period the actual figures are 15,000 for product A and 7,000 for product B. Costs are assigned and the wholesale margin on product A is calculated to be $450 and on product B it is $350.

Calculate the predicted and the actual sales mix, the variances that need to be examined and their impact.