The Estimated cost per unit of production of Pearl Ltd is as follows: Raw Material 22...

 

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The Estimated cost per unit of production of Pearl Ltd is as follows: Raw Material 22 Direct Labour 28, Factory Overheads (including depreciation of 10) 30. Office and Administration Expenses 15 Selling and Distribution cost 20 Company produces 100000 units and Raw Material is kept in stock for 2 months, Work in progress is RM 100% +50% conversion Cost and the Work in Progress period is 1 Month The finished goods are kept in stock for 1 months. 80 percent of sales are credit sales and credit period allowed is 2 months. Time lag for Office and Administration Expenses is 2 Months. Time Lag for Selling and Distribution expenses is 1 Month. Desired Cash level is 3,00,000 Considering the above mention details, you are required to estimate the working capital requirement of Nthe company. The Estimated cost per unit of production of Pearl Ltd is as follows: Raw Material 22 Direct Labour 28, Factory Overheads (including depreciation of 10) 30. Office and Administration Expenses 15 Selling and Distribution cost 20 Company produces 100000 units and Raw Material is kept in stock for 2 months, Work in progress is RM 100% +50% conversion Cost and the Work in Progress period is 1 Month The finished goods are kept in stock for 1 months. 80 percent of sales are credit sales and credit period allowed is 2 months. Time lag for Office and Administration Expenses is 2 Months. Time Lag for Selling and Distribution expenses is 1 Month. Desired Cash level is 3,00,000 Considering the above mention details, you are required to estimate the working capital requirement of Nthe company.

Answer rating: 100% (QA)

To estimate the working capital requirement of the company we need to consider various components such as raw material work in progress finished goods ... View the full answer