Question
The following data relate to Esteem Snacks, a manufacturing company Sales Turnover for the year Rs 150000 Costs as % of Sales % Direct Material
The following data relate to Esteem Snacks, a manufacturing company Sales Turnover for the year Rs 150000 Costs as % of Sales % Direct Material 25 Direct labour 30 Variable Production OH 10 Fixed Production OH 15 Selling & Distribution Expense 10 Profit margin 10
On average: Debtors take 2.5 months for payment, Raw material are in stock for three months, WIP represents two months work of half produced goods (100% material used), Finished good represent on month production. Credit period allowed by supplier is as follows:
Material 2 months, labor & Overheads 1 months In addition to this the firm would need to maintain cash balance of Rs 25000 on regular basis to ensure smooth running of business Compute the working capital requirement of Eastern Snack Company.
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