(a) Prepare a marginal costing profit statement for the year ended 31 December 2019.

(b) Explain, with supporting figures, the difference in net profit / loss in (a) above and that in the absorption costing profit statement.

(c) Calculate the break-even sales revenue for the year (to the nearest £000) using the marginal costing data.

(d) Calculate the sales revenue for the year (to the nearest £000) if JJ Ltd wishes to make a profit of £375,000 using the marginal costing data.
 

4/6 3. J] Ltd, is a manufacturing company. For the year ended 31 December 2019, its absorption costing profit statement is as follows: '000 C'000 11,200 Sales revenue Production cost of sales: Opening inventory of finished goods (60,000 units) Cost of production Closing inventory of finished goods (80,000 units) Gross profit (before adjustment) Under-absorption fixed production overheads Gross profit (after adjustment) Non-production overheads Net profit 540 8,240 (720) 8,060 3,140 (210) 2,930 (2,805) 125 In both the opening and closing inventory figures in the above profit statement, fixed production overheads average 2.00 per unit of finished product. Fixed production overheads absorbed into the cost of production in the year totalled 1,820,000. Non production overheads include variable costs of 710,00o0 and fixed costs of 2,095,000. Required: (a) Prepare a marginal costing profit statement for the year ended 31 December 2019. (6 marks) (b) Explain, with supporting figures, the difference in net profit / loss in (a) above and that in the absorption costing profit statement. (5 marks)