A company plans to manufacture and sell 400 units of a domestic appliance per month at...

 

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A company plans to manufacture and sell 400 units of a domestic appliance per month at a price of ? 600 eac The ratio of costs to selling price are as follows: Illustration 2: Raw materials Packing materials Direct labour Direct expense (% of selling price) 30% 10% 15% 5% Fixed overheads are estimated at 4.32.000 per annum The following norms are maintained for inventory management: Raw materials 30 days 15 days 200 units 7 days Packing materials Finished goods Work-in-progress Other particulars are given below. (a) Credit sales represent 80% of total sales and the dealers enjoy 30 working days credit. Balance 20% are co sales. (b) Creditors allow 21 working days credit for payment. (c) Log in payment of overheads and expenses is 15 working days. (d) Cash requirements to be 12% of net working capital. (e) Working days in a year are taken as 300 for budgeting purpose. Prepare a Working Capital requirement forecast for the budget year. A company plans to manufacture and sell 400 units of a domestic appliance per month at a price of ? 600 eac The ratio of costs to selling price are as follows: Illustration 2: Raw materials Packing materials Direct labour Direct expense (% of selling price) 30% 10% 15% 5% Fixed overheads are estimated at 4.32.000 per annum The following norms are maintained for inventory management: Raw materials 30 days 15 days 200 units 7 days Packing materials Finished goods Work-in-progress Other particulars are given below. (a) Credit sales represent 80% of total sales and the dealers enjoy 30 working days credit. Balance 20% are co sales. (b) Creditors allow 21 working days credit for payment. (c) Log in payment of overheads and expenses is 15 working days. (d) Cash requirements to be 12% of net working capital. (e) Working days in a year are taken as 300 for budgeting purpose. Prepare a Working Capital requirement forecast for the budget year.

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Working Capital Requirement Forecast Given Information Units produced and sold 400 unitsmonth Sellin... View the full answer