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Estimate working capital requirements

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Reference no: EM132581885

A proforma cost sheet of a company provides the following particulars:

Materials 40%

Direct labour 20%

Overheads 20%

The following information is also available:

a) It is proposed to maintain a level of activity of 2,00,000 units.

b) Selling price is ? 12 per unit

c) Raw materials are expected to remain in stores for an average period of one month.

d) Materials will be in process on an average ½ month.

e) Finished goods are required to be in stock for an average period of one month.

f) Credit allowed to debtors is 2 months.

g) Credit allowed by suppliers is 1 month.

Question 1: Estimate working capital requirements.

Reference no: EM132581885

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