A proforma cost sheet of a company provides the following particulars:- Element of cost – 40% Raw Materials – 10% Labour – 30% 

The following further particulars are available : 

(a) Raw materials are to remain in stores on an average – 6 weeks .

 (b) Processing time – 4 weeks ( assume 50% completion stage with full material consumption ).

 (c) Finished goods are required to be in stock on an average period – 8 weeks . 

(d) Credit period allowed to debtors,on average – 10 weeks . 

(e) Lag in payment of wages – 2 weeks . 

(f) Credit period allowed by creditors – 4 weeks . 

(g) Selling price – Rs.50 per unit . You are required to prepare an estimate of working capital requirements adding 10% margin for contingencies for a level of activity of 130000 units of production .
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