12. A manufacturing company has a capacity to produce 60,000 units p.a. The cost structure at that...
Question:
12. A manufacturing company has a capacity to produce 60,000 units p.a. The cost structure at that capacity and selling price p.u are given below:
Materials `5 Labour `2 Overhead `5 (60% variable; of the fixed overhead `30,000 represents depreciation)
`12 Profit `3 Selling Price `15 The other details are:
● Raw material storage period- 2 months; processing time- 1 month and finished goods in store-1 month.
● Debtors and Creditors turnover are 6 and 12 times a year respectively.
● Lag in payment of overhead is 1/2 month.
Assuming that the company will be able to utilize 80% of its capacity. Estimate the working capital requirement on cash cost basis.
Step by Step Answer:
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana