Solution-Explain difference between the expected and actual

Explain difference between the expected and actual profit

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Reference no: EM132622995

Calculus Company makes professional calculators. The profit plan and actual results for the previous year, 2019, are as follows:

	Profit plan		Actual Results
	Volume	pounds	Volume	Pounds
Sales	6,000	36,000	7,000	49,000
Cost of Goods sold
Raw Material (KG)	3,000	18,000	1,000	15,000
Raw material (L)	1,200	7,200	650	19,500
Labor (Hours)	300	3,600	280	5,600
Contribution Margin		7,200		8,900

Other costs
Energy		1,000		1,900
Maintenance		750		600
Depreciation		1,400		1,600
Profit before interest and tax		4,050		4,800

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

Required:

Problem 1: Explain the difference between the expected and actual profit. Show your workings.

Reference no: EM132622995

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Explain difference between the expected and actual profit

Reference no: EM132622995

Reference no: EM132622995

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