1. 2. 3. 4. 5. 6. Form the following information calculate WC:- Annual sales are estimated...

 

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1. 2. 3. 4. 5. 6. Form the following information calculate WC:- Annual sales are estimated 100000 units @ 20/- Production and sales quantities coincide and will be carried on evenly throughout the year and production cost is: Material 10/- per unit, Labour 4/- per unit & overhead 4/- per unit. Customers are given 60 days credit and 40 days credit taken from suppliers. 30 days of supply of RM and 15 days supply to FG. The production cycle is 30 days and all material are issued at the commencement of cash production cycle. A cash balance equal to one-third of the other average working capital is kept for contingencies. 1. 2. 3. 4. 5. 6. Form the following information calculate WC:- Annual sales are estimated 100000 units @ 20/- Production and sales quantities coincide and will be carried on evenly throughout the year and production cost is: Material 10/- per unit, Labour 4/- per unit & overhead 4/- per unit. Customers are given 60 days credit and 40 days credit taken from suppliers. 30 days of supply of RM and 15 days supply to FG. The production cycle is 30 days and all material are issued at the commencement of cash production cycle. A cash balance equal to one-third of the other average working capital is kept for contingencies.

Answer rating: 100% (QA)

SOLUTION To calculate the working capital WC we need to consider the various components involved Lets break down the information provided and calculate the WC step by step 1 Annual sales 100000 units ... View the full answer