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answer for q5 q6 and q7

Answer for q5 and q6

5. Selva and Co. desires to purchase a business and has consulted you and one point on which you are to advise them is the average amount of working capital which will be required in the first year's working. You have given the following estimates and instructed to add 10% to your computed figure to allow for contingencies. Amount blocked up for stocks: Figures for the year Stocks of finished product 3,000 Stocks of stores, materials, etc., 5,000 (ii) Average credit given: Inland sales 4 weeks credit 26,000 Export sales-1 weeks credit 65,000 (ii) Lag in payment of wages and other outputs Wages-1 weeks 24,000 Stocks of materials, etc.21 month 36,000 Rent, Royalties, etc. 4 months 8,000 Clerical staff-1 month 60,000 Manager-1 month 4,000 Miscellaneous expenses1 month 36,000 (iv) Payment in advance Sundry Expenses (paid quarterly in advance) 6,000 (v) Undrawn profit on the average throughout the year 9,000 State your calculations for the average amount of working capital required. 6 A performa cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month - credit allowed to customers is two months. Lag in payment of wages is 1 week. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. informations. 7. Mr. Siva wishes to commerce a new trading business and gives the following (0) The total estimated sales in a year will be Rs. 20,00,000. (ii) His expenses are estimated fixed Expenses of Rs. 3,000 per month plus variable expenses equal to 10% of his turnover. (iii ) He expects to fix a sales price for each product which will be33 1/3 % in excess of his cost of purchase. (iv) He expects to turnover his stock six times in a year. () The sales and purchases will be evenly spread throughout the year. All sales will 5. Selva and Co. desires to purchase a business and has consulted you and one point on which you are to advise them is the average amount of working capital which will be required in the first year's working. You have given the following estimates and instructed to add 10% to your computed figure to allow for contingencies. (1) Amount blocked up for stocks: Figures for the year Stocks of finished product 3,000 Stocks of stores, materials, etc., 5,000 (li) Average credit given: inland sales 4 weeks credit 26,000 Export sales-1 weeks credit 65,000 (11) Lag in payment of wages and other outputs Wages-1 weeks 24,000 Stocks of materials, etc.21 month 36,000 Rent, Royalties, etc. - 4 months 8,000 Clerical staff-1 month 60,000 Manager-1 month 4,000 Miscellaneous expenses-1 month 36,000 (iv) Payment in advance Sundry Expenses (paid quarterly in advance) 6,000 (v) Undrawn profit on the average throughout the year 9,000 State your calculations for the average amount of working capital required. 6 A performa cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month - credit allowed to customers is two months. Lag in payment of wages is 1 week. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. 5. Selva and Co. desires to purchase a business and has consulted you and one point on which you are to advise them is the average amount of working capital which will be required in the first year's working. You have given the following estimates and instructed to add 10% to your computed figure to allow for contingencies. Amount blocked up for stocks: Figures for the year Stocks of finished product 3,000 Stocks of stores, materials, etc., 5,000 (ii) Average credit given: Inland sales 4 weeks credit 26,000 Export sales-1 weeks credit 65,000 (ii) Lag in payment of wages and other outputs Wages-1 weeks 24,000 Stocks of materials, etc.21 month 36,000 Rent, Royalties, etc. 4 months 8,000 Clerical staff-1 month 60,000 Manager-1 month 4,000 Miscellaneous expenses1 month 36,000 (iv) Payment in advance Sundry Expenses (paid quarterly in advance) 6,000 (v) Undrawn profit on the average throughout the year 9,000 State your calculations for the average amount of working capital required. 6 A performa cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month - credit allowed to customers is two months. Lag in payment of wages is 1 week. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000. informations. 7. Mr. Siva wishes to commerce a new trading business and gives the following (0) The total estimated sales in a year will be Rs. 20,00,000. (ii) His expenses are estimated fixed Expenses of Rs. 3,000 per month plus variable expenses equal to 10% of his turnover. (iii ) He expects to fix a sales price for each product which will be33 1/3 % in excess of his cost of purchase. (iv) He expects to turnover his stock six times in a year. () The sales and purchases will be evenly spread throughout the year. All sales will 5. Selva and Co. desires to purchase a business and has consulted you and one point on which you are to advise them is the average amount of working capital which will be required in the first year's working. You have given the following estimates and instructed to add 10% to your computed figure to allow for contingencies. (1) Amount blocked up for stocks: Figures for the year Stocks of finished product 3,000 Stocks of stores, materials, etc., 5,000 (li) Average credit given: inland sales 4 weeks credit 26,000 Export sales-1 weeks credit 65,000 (11) Lag in payment of wages and other outputs Wages-1 weeks 24,000 Stocks of materials, etc.21 month 36,000 Rent, Royalties, etc. - 4 months 8,000 Clerical staff-1 month 60,000 Manager-1 month 4,000 Miscellaneous expenses-1 month 36,000 (iv) Payment in advance Sundry Expenses (paid quarterly in advance) 6,000 (v) Undrawn profit on the average throughout the year 9,000 State your calculations for the average amount of working capital required. 6 A performa cost sheet of a company provides the following particulars: Elements of Cost Amt. Per Unit (Rs.) Raw Materials 140 Direct Labours 60 Overheads 70 Total Cost 270 Profit 30 Selling Price 300 Further particulars available are: Raw materials are in stock on an average for one month. Materials are in process on an average for half a month. Finished goods are in stock on an average for one month. Credit allowed by suppliers is one month - credit allowed to customers is two months. Lag in payment of wages is 1 week. Lag in payment of overhead expenses is one month. One fourth of the output is sold against cash. Cash in hand and at bank is expected to be Rs. 50,000