Estimation of current assets, Financial Management

Assignment Help:

What is Estimation of Current Assets? Please provide me report on Estimation of Current Assets. It is about 2000 words count report on topic Estimation of Current Assets.

Related Discussions:- Estimation of current assets

Report on cash budget, The number of properties sold every month indicates ...

The number of properties sold every month indicates that Thorne Co experiences seasonal trends in its business. There is an sign that property sales are at a low level in winter an

List the benefits of the flexible exchange rate regime, List the benefits o...

List the benefits of the flexible exchange rate regime. Answer: The benefits of the flexible exchange rate system include: a) Automatic attainment of balance of payments eq

Operating cycle, how can an operating cycle be applied to a poultry busines...

how can an operating cycle be applied to a poultry business

Maturity risk premium is zero, The actual risk-free rate is 4%. Inflation i...

The actual risk-free rate is 4%. Inflation is likely to be 3% this year and 4% during the next 2 years. We suppose that the maturity risk premium is zero. What is the yield on 2

Mushrooming of public private partnerships, Question 1: i) Activity Bas...

Question 1: i) Activity Based Costing is better than the Traditional Product Costing. Discuss, by making use of empirical evidence ii) The replacement of cash-based accounti

Factors affecting working capital needs of firms, FACTORS AFFECTING WORKING...

FACTORS AFFECTING WORKING CAPITAL NEEDS OF FIRMS A large no. of reasons influences the working capital requirements of firms. a number of them are as follows: 1. Nature of

Display the position explicitly, Q. Display the position explicitly Ex...

Q. Display the position explicitly Example: I borrow 7800000 HKD at time t = t 0 at an interest rate r t0 . After one year I pay back 7800000(1 + rt o ). At

Role of Trustee in Pension Fund, Role of Trustee in Pension Fund: Trust...

Role of Trustee in Pension Fund: Trustees are people in control of long-term asset allocation of a pension scheme. Whatever benchmark they set will, as we shall see, influence

Calculate the net investment of the firm, Problem: i) Assume a firm bu...

Problem: i) Assume a firm buys a new tooling machine for Rs 2000,000, installation costs net of taxes are Rs 300,000. An existing asset has a book value of Rs 400,000 and the

Net income, What remains of an organization revenue after all expenses and ...

What remains of an organization revenue after all expenses and taxes have been paid.

Harry 2/14/2013 1:38:44 AM Estimation of Current Assets Current assets estimation includes: Raw materials Requirement cost This is computed by multiplying the daily requirement by the age of raw materials. Assume if the raw material cost is $5 per unit and the company expects to produce and sell 36000 units in the coming year and the age of raw materials is 45, raw materials requirement cost would be = Daily requirement x Age of raw materials. Raw Materials requirement cost = (36000 x $5 x 45) / 365 = $22,192 Work-in-Progress stock requirement cost This is computed by multiplying the daily requirement of various sub-components of WIP by the age of WIP (Work in progress). Suppose if the Raw material cost is $5 per unit and where as wages is $4 per unit and production overhead is $4 per unit and the age of WIP is 30 days, the WIP (Work in progress) stock requirement cost would be: (36000 units per year) Raw material component = 36,000 x $5 x 30 /365 = $14,795 Wages (Direct labor) Component = 36,000 x $4 x 30 / 365 = $11,836 Production overhead component = 36,000 x $4 x 30 / 365 = $11,836 Total WIP requirement cost = $38,467

Harry

2/14/2013 1:38:44 AM

Estimation of Current Assets

Current assets estimation includes:

Raw materials Requirement cost

This is computed by multiplying the daily requirement by the age of raw materials. Assume if the raw material cost is $5 per unit and the company expects to produce and sell 36000 units in the coming year and the age of raw materials is 45, raw materials requirement cost would be = Daily requirement x Age of raw materials.

Raw Materials requirement cost = (36000 x $5 x 45) / 365 = $22,192

Work-in-Progress stock requirement cost

This is computed by multiplying the daily requirement of various sub-components of WIP by the age of WIP (Work in progress). Suppose if the Raw material cost is $5 per unit and where as wages is $4 per unit and production overhead is $4 per unit and the age of WIP is 30 days, the WIP (Work in progress) stock requirement cost would be: (36000 units per year)

Raw material component = 36,000 x $5 x 30 /365 = $14,795

Wages (Direct labor) Component = 36,000 x $4 x 30 / 365 = $11,836

Production overhead component = 36,000 x $4 x 30 / 365 = $11,836

Total WIP requirement cost = $38,467

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages