Illustration 7: M.A. Limited is commencing a new project for manufacture of a plastic component. The following cost information has been ascertained for annual production of 12,000 units which is the full capacity: Costs per unit () Materials 40 Direct labour and variable expenses 20 Fixed manufacturing expenses 6 Depreciation 10 Fixed administration expenses 4 80 The selling price per unit is expected to be 96 and the selling expenses 75 per unit. 80% of which is variable. 8,500 In the first two years of operations, production and sales are expected to be as follows: Year Production Sales (No. of units) (No.of units) 1 6,000 5,000 2. 9,000 To assess the working capital requirements, the following additional information is available: (a) Stock of materials 2.25 months' average consumption (6) Work-in-process Nil (c) Debtors 1 month's average sales. (d) Cash balance 10,000 (e) Creditors for supply of materials 1 month's average purchase during the year. () Creditors for expenses 1 month's average of all expenses during the year. Prepare, for the two years: (1) A projected statement of Profit/Loss (Ignoring taxation); and (ii) A projected statement of working capital requirements