Prepare a statement showing the working capital requirements for level of activity of 36.000 units of...

 

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Prepare a statement showing the working capital requirements for level of activity of 36.000 units of output for the year. The cost structure for the Company's product for the above mentioned activity level is given below: Cost per unit (Rs.) Raw Materials Direct Labour Overheads Total Profit Selling Price |8|u47 | 848 30 (a) Raw materials are held in stock, on an average for 3 months. (b) Work-in-progress (100% complete in regard to materials and 50% for labour and overheads) will be 1.5 months production. (c) Finished goods are in stock on an average for 2 months. (d) Credit allowed by suppliers 3 months. (e) Credit allowed to debtors 2.5 months. (f) A minimum cash balance of Rs. 30,000 is expected to be maintained. Prepare a statement of Working Capital Requirement. Prepare a statement showing the working capital requirements for level of activity of 36.000 units of output for the year. The cost structure for the Company's product for the above mentioned activity level is given below: Cost per unit (Rs.) Raw Materials Direct Labour Overheads Total Profit Selling Price |8|u47 | 848 30 (a) Raw materials are held in stock, on an average for 3 months. (b) Work-in-progress (100% complete in regard to materials and 50% for labour and overheads) will be 1.5 months production. (c) Finished goods are in stock on an average for 2 months. (d) Credit allowed by suppliers 3 months. (e) Credit allowed to debtors 2.5 months. (f) A minimum cash balance of Rs. 30,000 is expected to be maintained. Prepare a statement of Working Capital Requirement.

Answer rating: 100% (QA)

Given Output per year 36000 units Then output per month should be 36000 units1... View the full answer