Perkora Bains plc manufactures household fittings. The company uses a system of divisional management, with divisions split by product type. All divisions are treated as profit centres. The accountant in the bathroom division (BD) has gathered the following data for production of the quarterly performance statement which is due for submission to head office:

Of the fixed costs, £37 000 is non-controllable at divisional level. The head office cost allocation relates to research and development and marketing expenditure.

a) Prepare a divisional Performance statement for BD

b) identify the amount of profit that should be used as an indicator of divisional performance.
 

Direct materials cost Direct labour cost Sales Depreciation of fixed assets Fixed costs excluding depreciation Head office cost allocation 000 280 311 1671 112 580 337