15. From the following information, compute the Working Capital requirement: (i) Activity level: 10,400 units of output
Question:
15. From the following information, compute the Working Capital requirement:
(i) Activity level: 10,400 units of output p.a.
(ii) Selling price per unit: `5
(iii) Cost of raw materials: 40% of sales
(iv) Cost of labour: 10% of sales
(v) Overhead: 30% of sales (vi) Profit: 20% of sales (vii) Credit allowed to debtors: 2 months (viii) Credit allowed by creditors: 2 months (ix) Raw materials in store: 2 months (x) Processing period: 6 weeks (xi) Finished goods in store: 6 weeks (xii) Lag in wage and overhead payment: 2 weeks (xiii) Cash in hand: `10,000 (xiv) Production is carried on evenly during the year and expenses accrue in the same way. Assume 1 month = 4 weeks.
Step by Step Answer:
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana