The figures given below are all that could be salvaged from the records after a recent fire in the offices of Firelighters Limited. The company manufactures a single product, has no raw materials or work in progress and values its stocks at marginal cost (i.e. at variable manufacturing cost) using the FIFO basis. It is known that the unit closing stock valuation in 20X0 was the same as in 20X9.

Required:

Prepare a revenue statement for management showing contribution, operating profit and net profit for each year in as much detail as the information given above permits.

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Selling price per unit Variable manufacturing cost (per unit produced) Variable selling cost (per unit sold) Quantity sold (units) Quantity manufactured (units) Contribution Fixed manufacturing costs Other fixed costs Operating profit before interest charges Interest charges Opening finished stock (units) Closing finished stock (units) Net profit for the year 20X0 £10.00 £4.00 £1.25 100,000 105,000 ? £105,000 £155,000 ? £70,000 ? 20,000 ? 20X1 £10.00 £4.00 ? ? 130,000 £585,000 £117,000 ? £292,000 ? ? 20,000 £210,000