1. Calculus Company makes professional calculators. The profit plan and actual results for the previous year, 2020, are as follows:

	Profit Plan		Actual Results
	Volume	Pounds	Volume	Pounds
Sales	3,000	42,000	6,000	60,000
Cost of Goods Sold
Raw material (KG)	5,000	8,000	8,000	12,000
Raw material (L)	10,000	7,500	12,000	6,000
Labor (Hours)	900	4,500	1,600	12,000
Contribution Margin		22,000		30,000
Other costs
Energy		3,000		5,000
Maintenance		2,000		3,000
Depreciation		4,000		5,000
Selling expenses		6,000		6,000
Advertising		6,000		7,000
Profit before interest and tax		1,000		4,000

The plant manager, Salem, has instructed the plant management accountant to prepare a detailed report to be sent to corporate headquarters comparing each components actual result with the amounts set forth above in the annual budget.

Required: Explain the difference between the expected and actual profit. Show your workings.