● Production is carried out evenly during the year and wages and expenses accrue similarly.

What is the effect of double shift working on the requirement of Working Capital?

(i) Annual Sales `2,40,000

(ii) Analysis of Sales:

Materials—60%, Labour—15%, Overheads—15%, Profit—10%

(iii) Credit allowed to debtors 2 months Credit allowed by creditors 1 month Lag in payment of wages 1 month Lag in payment of overhead 1 month Raw materials in store 4 months Processing period 3 months Finished goods in store 4 months Expected cash balance `50,000