ABC Limited is a family owned business that has been in operation for the past ten years. The company based in Kabwe manufactures one product: desks. ABC limited Managing Director, Mr. Aubrey Bwalwa Chuungu has been away on a business trip to China for the past three months. He is worried that the current outbreak of the Corona virus and the subsequent restrictions imposed on commerce by the Zambian government may have had adverse financial consequences for the company. You are the Management Accountant of ABC Limited. On his return, Mr. Chuungu , who is a non-finance specialist, has requested a financial review of the companys financial performance for the last month , May 2020 in order to put his fears to rest. You have just received an email from Mr. Chuungu to conduct a financial performance analysis for the month May, 2020. You have retrieved the following computer printout from the companys management accounts for the month of May, 2020: Actual Budget Sales volume 4,900 units 5,000 units Selling price per unit K11.00 K10.00 Production volume 5,400 units 5,000 units Direct materials: Quantity 10,600 kg 10,000 kg Price per kg K0.60 K0.50 Direct labour: Hours 2,970 2,500 Rate per hour K3.80 K4.00 3 Fixed overheads: Production K10, 300 K10, 000 Administration K3,100 K3,000 ABC Limited uses a standard absorption costing system, absorbing overheads into products using labour hours. There was no opening or closing work-in-progress for the month of May,2020. Required: (a) Prepare a statement that reconciles the budgeted profit with the actual profit for the month of May, 2020, showing individual variances in as much detail as possible.