A proforma cost sheet of a company provides the following information;

Elements of cost

	Amt per unit
Raw material	80
Direct labour	30
Overheads	60
Total cost	170
Profit	30
Selling price	200

The following further information are available

Raw materials are in stock on an average for one month . Work in progress for half a month . Finished goods are in stock on average for one month

Credit is allowed by suppliers is one month. Credit allowed to customers is 2 months. Lag in payment of wages is 1.5 weeks .Lag in payment of expenses is one month

of output is sold against cash. Cash in hand and at bank is expected to be $ 25000 . You are required to prepare a statement showing working capital needed to finance a level of activity of 104 000 units of production

You may assume that production is carried on evenly through out the year, wages and overhead accrue similarly and a time perio2/52 d of 4 weeks is equivalent to a month

Required

Prepare an estimate of working capital requirement from the following information of a trading business [10 marks]