The cost sheet of ABC Ltd provides the following data:

Particulars Cost                                     per unit

Raw Material

Direct labour                                           

Overheads with depreciation

Total cost

Profit                                                         

Selling price

Average raw material in stock is for one month. Average materials in workinprogress are for half month. Credit allowed by suppliers; one month; credit allowed to debtors; one month. Average time lag in payment of wages; days; average time lag in payment of overheads; days. of the sales are on cash basis. Cash balance expected to be Rs Finished goods lie in the warehouse for one month.

You are required to prepare a statement of the working capital needed to finance a level of the activity of units of output. Production is carried on evenly throughout the year and wages and overheads accrue similarly. State your assumptions, if any, clearly

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To prepare the statement of working capital needed to finance a level of activity of 54000 units of ... View the full answer