A proforma cost sheet of a company provides the following particulars:- Element of cost 40% Raw
Question:
A proforma cost sheet of a company provides the following particulars:- Element of cost – 40% Raw Materials – 10% Labour – 30%
The following further particulars are available :
(a) Raw materials are to remain in stores on an average – 6 weeks .
(b) Processing time – 4 weeks ( assume 50% completion stage with full material consumption ).
(c) Finished goods are required to be in stock on an average period – 8 weeks .
(d) Credit period allowed to debtors,on average – 10 weeks .
(e) Lag in payment of wages – 2 weeks .
(f) Credit period allowed by creditors – 4 weeks .
(g) Selling price – Rs.50 per unit . You are required to prepare an estimate of working capital requirements adding 10% margin for contingencies for a level of activity of 130000 units of production .
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Managerial Accounting
ISBN: 978-1285866307
13th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac