A cost sheet of a accompany provides the following data

Particulars	Amount per unit
Raw Material	52
Direct Labour	19.5
Overheads	39
Total Cost	110.5
Profit	19.5
Selling Price	130

The following further particulars are available:

a) Raw material is in stock ,on an average for one month; materials are in process, on an average for half a month; finished goods are in stock for one month.

b) Credit allowed by suppliers is two months; credit allowed to debtors is two months; lag in payment of wages is 1.5 weeks; lag in payment of overheads is one month.

c) One fourth of the output is sold against cash; cash in hand and at bank is expected to be Rs 25,000.

You are required to prepare a statement showing working capital needed to finance a level of activity of 70,000 units of production, assuming a 20% safety margin.

Answer rating: 100% (QA)

z Statement showing estimating working capized current Assets stock of R... View the full answer