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Prepare statement of working capital requirements

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Reference no: EM132499062

A proforma cost sheet of a company provides the following particulars Elements of Cost

Material 40%

Direct Labour 20%

Overheads 20%

The following further particulars are available:

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

ii) Selling price is Rs. 12/- per unit.

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

iv) Materials will be in process, on averages half a month.

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

vi) Credit allowed to debtors is two months.

vii) Creditor allowed by suppliers is one month. You may assume that sales and production follow a consistent pattern.

You are required to prepare statement of working capital requirements.

Reference no: EM132499062

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