The following information relates to Pole Limited for the year to 31 January 2007.

Question

	£000
Administration expenses:
Fixed	30
Variable	7
Semi-variable (fixed 80%, variable 20%)	20
Materials:
Direct	60
Indirect	5
Production overhead (all fixed)	40
Research and development expenditure:
Fixed	60
Variable	15
Semi-variable (fixed 50%, variable 50%)	10
Sales	450
Selling and distribution expenditure:
Fixed	80
Variable	4
Semi-variable (fixed 70%, variable 30%)	30
Wages:
Direct	26
Indirect	13

Required:

Using the above information, compile a contribution analysis statement for Pole

Limited for the year to 31 January 2007.

Accepted Answer

Contribution analysis for Pole Ltd

Pole Limited
Marginal cost statement for the year to 31 January 2007

	£000	£000
Sales		450
Less: Variable costs:
Direct materials	60
Direct wages	26
Administration expenses: variable (£7 + 4)	11
Research and development expenditure:
variable (£15 + 5)	20
Selling and distribution expenditure:
variable (£4 + 9)	[latex]\underline{ 13}[/latex]	[latex]\underline{ 130}[/latex]
		320
Contribution
Less: Fixed costs:
Administration expenses (£30 + 16)	46
Materials: indirect	5
Production overhead	40
Research and development expenditure
(£60 + 5)	65
Selling and distribution expenditure
(£80 + 21)	101
Wages: indirect	[latex]\underline{ 13}[/latex]	[latex]\underline{ 270}[/latex]
Profit		[latex]\underline{\underline{ 50}}[/latex]

Question 19.TQ.4: The following information relates to Pole Limited for the ye...