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11. Following details are available from the management of BAS Ltd: Particulars Amount per unit) Raw materials 120 Direct labour 45 Overhead 90 The company
11. Following details are available from the management of BAS Ltd: Particulars Amount per unit) Raw materials 120 Direct labour 45 Overhead 90 The company wants to make 15% profit on sales price. The following further particulars are available: Raw materials are kept in stock, on average, for one month. Processing time can be taken as, on average, half a month; Finished goods in stock, on average, for 30 days. Credit enjoyed by BAS Ltd. in one month; Credit allowed is for two months; Average time-lag in payment of wages and overhead is one month. Cash in hand and at bank is desired to be maintained at 30,000. BAS Ltd. prefers to value debtors at sales value. Compute the working capital required for BAS Ltd. with necessary assumptions to finance a level of activity of 24,000 units of production in the next year. 20
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