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

	Actual Results		Profit Plan
	Volume	Pounds	Volume	Pounds
Sales	25,000	300,000	22,000	330,000
Cost of Goods Sold
Raw material (KG)	2,500	50,000	2,000	44,000
Raw material (L)	6,250	62,500	4,950	79,200
Labor (Hours)	2,000	46,000	2,895	57,900
Contribution Margin		141,500		148,900
Other costs
Energy		15,000		10,000
Maintenance		6,000		9,000
Depreciation		10,000		15,000
Selling expenses		20,000		30,000
Advertising		5,000		12,000
Profit before interest and tax		85,500		72,900

The plant manager, Kamel, 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.