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Level of Activity = 1,040,000 units Selling Price = PKR 20 per unit Raw Material Cost = PKR 8 per unit Labor Cost = PKR

  • Level of Activity = 1,040,000 units
  • Selling Price = PKR 20 per unit
  • Raw Material Cost = PKR 8 per unit
  • Labor Cost = PKR 3 per unit
  • Overhead Cost = PKR 6 per unit
  • Raw Material in Stock = 4 weeks
  • Processing Time = 2 weeks
  • Finished Goods in stock = 3 weeks
  • Credit received from customer is 8 weeks
  • Credit received from supplier is 6 weeks
  • Delay in payment of wages is 4 weeks
  • Delay in payment of overheads is 5 weeks
  • Prepaid Expenses = PKR 20,000
  • Outstanding Expenses = PKR 50,000
  • Contingency is 5% of Gross Working Capital
  • Calculate Gross working capital , Net working capital and length of the Working Capital Cycle?

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