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I detailed answer I'll upvote Average raw material in stock is for 1 month. Average material in work in progress is for half month. Credit

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Average raw material in stock is for 1 month. Average material in work in progress is for half month. Credit allowed to supplier: 1 month and credit allowed to debtors: 1 month. Average time lag in payment of wages is 10 days. Average time lag in payment of overheads is 30 days. 25% of sales are on cash basis. Cash balance is expected to be Rs.1,00,000. Finished goods lie in warehouse for 1 month. You are required to make a statement of working capital needed to finance a level of the activity of 54,000 units of output. Production is car ried on evenly throughout the year and wages and overheads accrue similarly

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