Reference no: EM132608587

Question - You have been given the following information for WCL Limited: Per Unit - Raw materials 160, Direct labour 60, Overheads 120, Total cost 340, Profit 60, Selling price 400. Raw materials are held 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 and credit allowed to debtors is two months. Time lag in payment of wages is 1½ weeks. Time lag in payment of overhead expenses is one month. One fourth of the sales are made on cash basis. Cash in hand and at the bank is expected to be $50,000; and expected level of production amounts to 104,000 units for a year of 52 weeks. You may assume that production is carried on evenly throughout the year and a time period of four weeks is equivalent to a month. Calculate the amount of working capital requirement for WCL Limited.