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

	Profit Plan		Actual Results
	Volume	Pounds	Volume	Pounds
Sales	32,000	480,000	30,000	360,000
Cost of Goods Sold
Raw material (KG)	3,000	45,000	3,200	64,000
Raw material (L)	5,000	80,000	7,500	75,000
Labor (Hours)	5,000	125,000	4,000	92,000
Contribution Margin		230,000		129,000
Other costs
Energy		25,000		15,000
Maintenance		12,000		6,000
Depreciation		20,000		10,000
Selling expenses		25,000		20,000
Advertising		10,000		5,000
Profit before interest and tax		138,000		73,000

The plant manager, Khaled, 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.( and drawing the variances tree)