2. A Company provided the following data: Per unit cost (`) Raw Materials 52.00 Direct Labour 19.50...
Question:
2. A Company provided the following data:
Per unit cost (`)
Raw Materials 52.00 Direct Labour 19.50 Overheads 39.00 Total Cost 110.50 Profit 19.50 Selling Price 130.00 The following additional information is available:
(a) Average raw materials in stock: 1 month.
(b) Average materials in process: ½ month
(c) Average finished goods in stock: 1 month
(d) Credit allowed by suppliers: 1 month
(e) Credit allowed to debtors: 2 months.
(f) Time lag in payment of wages: 1½ weeks.
(g) Overheads: 1 month (h) One-fourth of sales is on cash basis.
(i) Cash balance is expected to be `1,20,000.
You are required to prepare a statement showing the Working Capital needed to finance a level of activity of 70,000 units of annual output. The production is carried throughout the year on even basis and wages and overheads accrue similarly. (Calculation be made on the basis of 30 days a month and 52 weeks a year.)
Step by Step Answer:
Financial Management
ISBN: 9789352605606
1st Edition
Authors: Swapan Sarkar, Bappaditya Biswas, Samyabrata Das, Ashish Kumar Sana