Marginal Cost Statement Revision Question

CK Limited has spare capacity in her factory and is

considering taking an order which has the following

estimated expenses for the year to ${30}^{th}$ June $2021.$

EXPENSES

Wages Indirect

Wages direct

Materials indirect

Materials direct

Production overheads

$50\%$ fixed $/50\%$ variable

Sales

Selling & Distribution expenses fixed

Selling & Distribution expenses variable

Administration Expenses fixed

Administration Expenses variable

Administration Expenses semi $-$ variable

$60\%$ fixed $40\%$ variable

Marketing expenses fixed

Marketing expenses variable

Marketing Expenses semi $-$ variable

$70\%$ fixed $30\%$ variable

Miscellaneous expenses fixed

Miscellaneous expenses variable

Marketing Expenses semi $-$ variable

$80\%$ fixed $20\%$ variable

$(0000)$

$88$

$204$

$170$

$406$

$200$

$2,200$

$176$

$20$

$144$

$60$

$40$

$150$

$60$

$30$

$400$

$200$

$100$

Required:

$($a$)$ Compile a Marginal Cost Statement for CK Ltd for

the year to ${30}^{th}$ June $2021.$

$($b$)$ Should CK accept this order? Give reasons to support

your recommendations.

$($c$)$ What are the advantages and drawbacks of marginal

costing?