The Pharmacy company cost sheet provides the following particulars

	Cost per unit(Rs.)
Elements of cost
Raw materials	100
Direct labour	60
Overhead	40
Total cost	200
Profit	50
Selling price	250

The following further particulars are available

Raw materials stock on average 2 months manufacturing process 1 month materials are

added at the beginning of the process labour and overheads accrue evenly during the

production period. Finished goods remain in stock for 1 month. Credit allowed by suppliers

1 month credit allowed to customers on credit sales 2 months Time lag in payment of wages and overheads 1 month.25% of total Sales are for cash. Cash balance required to be kept Rs.1,00,000

Prepare an estimate of working capital requirement for production of 1,20, 000 units in the year

Answer rating: 100% (QA)

Answer Working Capital Requ irement Raw Materials 2 months of Raw Materials Cost 2 x 1 20 000 x ... View the full answer