From the following particulars workout the amount of working capital Required:5

Elements of costAmount per unit

Raw materials8

Direct labour2

Overheads6

Total cost16

Profit4

Selling price20

(1)Raw materials are in stock, on an average 1 month.

(2)Materials are in process, on an average half a month.

(3)Finished goods are in stock on an average 6 weeks

(4)Credit allowed by creditors is one month.

(5)Credit allowed to debtors is 2 months.

(6)Lag in payment of wages is 1.5 weeks.

Assumes 52 weeks in a year and 4 weeks in a month.