The following budgeted profit statement has been prepared using absorption costing principles.

January to June 2017	July to December 2017
Sales 540 Opening inventory 100 Production costs: Direct materials 108 Direct labour 162 Overhead 90 460 Closing inventory 160 300 240 GROSS PROFIT Production Overhead: (Over)/under absorption Selling costs (12) Distribution costs 50 Administration costs 45 80 Net profit 163 77 Sales units 15000 Production units 18000	360 160 36 54 30 280 80 200 160 12 50 40 80 182 22 10 000 6 000

The members of the management team are concerned by the significant change in profitability between the two six months periods. As a management accountant, you have analyzed the data upon which the above budget statement has been produced, with the following

• The production overhead cost comprises both a fixed and a variable element. The latter appears to be dependent on the number of units produced, The fixed element of the cost is expected to be incurred at a constant rate throughout the year.
• The selling costs are fixed
• The distribution cost comprises both fixed and variable elements. The latter appears to be dependent on the number of units sold. The fixed element of the sot is expected to be incurred at a constant rate throughout the year.
• The addministart6ion a costs are fixed

Required:

Present the above budgeted profit statement in marginal costing format.