ILLUSTRATION 3 On 15 January, the Managing Director of Naureen Ltd. wishes to know the most working capital that will be required during the year. From the following informes Production during the previous year was 60,000 units. It is planned that this we activity would be maintained during the present year, The expected ratios of the cost to selling prices are Raw materials 60%, Direct way. I and Overheads 20% prepare the working capital requirements forecast. KING CAPITAL 11.19 are expected to remain in store for an average of 2 months before issue Raw materials to production 10 month 3 months. Each unit is expected to be in process for one month, the raw materials being fed into the pipeline immediately and the labour and overhead costs accruing evenly during the Finished goods will stay in the warehouse awaiting dispatch to customers for approximately Credit allowed by creditors is 2 months from the date of delivery of raw material. Credit allowed to debtors is 3 months from the date of dispatch. Selling price is 5 per unit. There is a regular production and sales cycle. Wages and overheads are paid on the 1" of each month for the previous month. The company normally keeps cash in hand to the extent of 20,000 ILLUSTRATION 3 On 15 January, the Managing Director of Naureen Ltd. wishes to know the most working capital that will be required during the year. From the following informes Production during the previous year was 60,000 units. It is planned that this we activity would be maintained during the present year, The expected ratios of the cost to selling prices are Raw materials 60%, Direct way. I and Overheads 20% prepare the working capital requirements forecast. KING CAPITAL 11.19 are expected to remain in store for an average of 2 months before issue Raw materials to production 10 month 3 months. Each unit is expected to be in process for one month, the raw materials being fed into the pipeline immediately and the labour and overhead costs accruing evenly during the Finished goods will stay in the warehouse awaiting dispatch to customers for approximately Credit allowed by creditors is 2 months from the date of delivery of raw material. Credit allowed to debtors is 3 months from the date of dispatch. Selling price is 5 per unit. There is a regular production and sales cycle. Wages and overheads are paid on the 1" of each month for the previous month. The company normally keeps cash in hand to the extent of 20,000