● With the following information, prepare a statement showing the Working Capital required to finance a level of activity of 10,400 units per annum:

(i) Selling price at the rate of `5 per unit

(ii) The expected ratios of cost to selling prices are as follows:

(a) Raw material, 40%

(b) Direct wages, 10%

(c) Overheads, 30%

(d) Profit, 20%

(iii) Raw materials are expected to remain in store for an average period of 2 months before being used for production, and materials are in process on an average period of 6 weeks.

(iv) Finished goods will stay in store approximately for 6 weeks before dispatch to customers.

(v) Credit allowed to debtors is for a period of 2 months.

(vi) Credit allowed by creditors is for a period of 2 months.

(vii) Lag in payment of wages and overheads is for a period of 2 weeks.

(viii) Cash in hand and bank is expected to be `10,000. It may be noted that production is carried on evenly during the year and wages and overheads accrue similarly. Assume 4 weeks a month.