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A cost sheet of a accompany provides the following data Particulars Amount per unit Raw Material 52 Direct Labour 19.5 Overheads 39 Total Cost 110.5

A cost sheet of a accompany provides the following data

Particulars

Amount per unit

Raw Material

52

Direct Labour

19.5

Overheads

39

Total Cost

110.5

Profit

19.5

Selling Price

130



The following further particulars are available:

a) Raw material is in stock ,on an average for one month; materials are in process, on an average for half a month; finished goods are in stock for one month.

b) Credit allowed by suppliers is two months; credit allowed to debtors is two months; lag in payment of wages is 1.5 weeks; lag in payment of overheads is one month.

c) One fourth of the output is sold against cash; cash in hand and at bank is expected to be Rs 25,000.

You are required to prepare a statement showing working capital needed to finance a level of activity of 70,000 units of production, assuming a 20% safety margin.

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