A company is currently operating at 75 of its capacity

Reference no: EM13379448

A company is currently operating at 75% of its capacity producing 60,000 units during the year 2009 at the following cost price structure:


Raw Materials per unit		5.00
Wages per unit		4.00
Overheads per unit:
Variable	2.00
Fixed	2.00	4.00
Profit per unit		2.00
Selling Price per unit		15.00

On 31 December 2009, the company has the following Current Assets and liabilities:


Stock of Raw Materials - 10,000 units at cost	50,000
Stock of WIP - 5,000 units at cost	45,000
Stock of Finished Goods - 15,000 units at cost	1,95,000
Sundry Debtors	1,50,000
Sundry Creditors	50,000
Liability for Wages	20,000
Liability for Overheads	10,000

In view of the increased demand for the product, it has been decided to operate at 90% capacity on and from 01 January 2010 at the same cost price structure, period of block and selling price of 2009.

Calculate the additional Working Capital Requirement for the year 2010.

Reference no: EM13379448

Questions Cloud

A company is currently operating at 80 of its capacity : a company is currently operating at 80 of its capacity producing 48000 units per year at the following cost price

Assignment 1 making decisions based on demand and : assignment 1 making decisions based on demand and forecastingdue week 3 and worth 200 pointsthe pizza company is

Suppose there are 2 countries home and foreign two factors : suppose there are 2 countries home and foreign two factors of production capital and labor and two products food and

A company is currently operating at 60 of its capacity : a company is currently operating at 60 of its capacity producing 36000 units during the year 2009 at the following cost

A company is currently operating at 75 of its capacity : a company is currently operating at 75 of its capacity producing 60000 units during the year 2009 at the following cost

If you borrow 3000 and pay back 3410 after 15 yearsa what : if you borrow 3000 and pay back 3410 after 1.5 yearsa what is the interest rate charged if the payment period is 1.5

Marginal propensity 063 - 076what is expenditure : marginal propensity 0.63 - 0.76what is expenditure multiplier?wil increase from to and if multiplier increases

A university spent 18 million to install solar panels atop : a university spent 1.8 million to install solar panels atop a parking garage. these panels will have a capacity of 500

An excise tax may be imposed on a commodity in order to : an excise tax may be imposed on a commodity in order to raise revenue for the government or in order to reduce the

User Account

All Pages