Prepare a statement showing the working capital requirements for level of activity of 36.000 units of...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Prepare a statement showing the working capital requirements for level of activity of 36.000 units of output for the year. The cost structure for the Company's product for the above mentioned activity level is given below: Cost per unit (Rs.) Raw Materials Direct Labour Overheads Total Profit Selling Price |8|u47 | 848 30 (a) Raw materials are held in stock, on an average for 3 months. (b) Work-in-progress (100% complete in regard to materials and 50% for labour and overheads) will be 1.5 months production. (c) Finished goods are in stock on an average for 2 months. (d) Credit allowed by suppliers 3 months. (e) Credit allowed to debtors 2.5 months. (f) A minimum cash balance of Rs. 30,000 is expected to be maintained. Prepare a statement of Working Capital Requirement. Prepare a statement showing the working capital requirements for level of activity of 36.000 units of output for the year. The cost structure for the Company's product for the above mentioned activity level is given below: Cost per unit (Rs.) Raw Materials Direct Labour Overheads Total Profit Selling Price |8|u47 | 848 30 (a) Raw materials are held in stock, on an average for 3 months. (b) Work-in-progress (100% complete in regard to materials and 50% for labour and overheads) will be 1.5 months production. (c) Finished goods are in stock on an average for 2 months. (d) Credit allowed by suppliers 3 months. (e) Credit allowed to debtors 2.5 months. (f) A minimum cash balance of Rs. 30,000 is expected to be maintained. Prepare a statement of Working Capital Requirement.
Expert Answer:
Answer rating: 100% (QA)
Given Output per year 36000 units Then output per month should be 36000 units1... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Posted Date:
Students also viewed these accounting questions
-
Prepare a statement showing the pricing of issues, on the basis of (5 marks) (a) First In First Out (FIFO) (b) Simple Average and 2018 March 1 Opening balances 250 units @ OMR 7.5 each 2 Purchased...
-
Required: i. Prepare a statement showing September 2021 revenue and spending variances. ii. Comment on each variance of RM10,000 or more by suggesting possible reasons linking to the current economic...
-
Direct material cost $ 85 comma 000 per unit of RS-32 Direct manufacturing labor time for first unit 3 comma 900 direct manufacturing labor-hours Learning curve for manufacturing labor time per radar...
-
How are the square numbers embedded in Pascals triangle?
-
Income Statement for a Merchandiser Fill in the missing amounts in the following income statement for Carpenters Department Store Inc. $125,600 (al Less: Sales returns and allowances $122,040 $23,400...
-
Determine the Fourier series expansion of the sawtooth function in Fig. 17.67. fo)
-
1.15 Euro Virtual's EPS Sensitivity to Exchange Rates (B). Assume a major weather crisis hits Switzerland, reducing its agricultural and food industries and sub- sequently leading to a macroeconomic...
-
A shirt manufacturer buys cloth by the 100- yard roll from a supplier. For setting up a control chart to manage the irregularities (e. g., loose threads and tears), the following data were collected...
-
The bank reconciliation prepared by Gemma Tours on March 31,2023, appeared as follows:GEMMA TOURSBank ReconciliationMarch 31, 2023Bank statement balance$14,100Book balance$31 2 answers
-
Paolo is a 50% partner in the Capri Partnership and has decided to terminate his partnership interest. Paolo is considering two options as potential exit strategies. The first is to sell his...
-
Has a man swung a sledgehammer done work if he misses the stake at which he is swinging?
-
A client has a desired retirement savings goal of 1.5 million to be achieved seven years from now. She plans on making only one deposit into her account, and an annual return of 8% per year is...
-
The return pattern on your favorite stock has been 5%, 8%, -12%, 15%, 21% over the last five years. What is your average return and total change in wealth per year over the period?
-
Year Board Game (Rs.) DVD (Rs.) 0 -950 -2100 1 700 1500 2 550 1050 3 130 450 a. Based on the payback period rule, which project should be chosen? b. Based on the NPV, which project should be chosen?...
-
To better manage the stocks of the two companies you selected in Assignment 2/3 Preparation, Part 2 (which should have been submitted already and is worth 5% of your overall course grade), it is a...
-
You work for Athens Inc., and you are asked to estimate the Year 2 CCA for a project with the following data. What is the Year 2 CCA (Capital Cost Allowance)? Working capital investment Equipment...
-
Analyze and compare the two models. 1) Is one model better than the other? Why? Explain your answer fully by analyzing the standard deviation of the prediction errors and any other relevant model...
-
For what reason might an exporter use standard international trade documentation (letter of credit, draft, order bill of lading) on an intrafirm export to its parent or sister subsidiary?
-
Nestle Group, a multinational food products firm based in Switzerland, recently issued its financial statements. The auditor's opinion attached to the financial statements stated the following: ''In...
-
Identify where the cash flow effect of each of the following transactions is reported in the statement of cash flows: operating, investing, or financing section. State the direction of each change....
-
In practice, it is common to observe priceearnings ratios measured as current period price divided by trailing twelve months (or most recent annual) earnings per share. Identify and explain three...
-
You are offered the opportunity to buy a note for \($12,800.\) The note is certain to pay \($2,000\) at the end of each of the next 10 years. If you buy the note, what rate of interest will you...
-
What is the value of a 15-year annuity that pays \($500\) a year? The annuitys first payment is at the end of year 6 and the annual interest rate is 12 percent for years 1 through 5 and 15 percent...
-
Mark Weinstein has been working on an advanced technology in laser eye surgery. The technology is expected to be available to the medical industry two years from today and will generate annual income...
Study smarter with the SolutionInn App