A proforma cost sheet of a company provides the following particulars :- Element of cost – 40% Raw Materials – 10% Labour – 30% The following further particulars are available : (a) Raw materials are to remain in stores on an average – 6 weeks . (b) Processing time – 4 weeks ( assume 50% completion stage with full material consumption ). (c) Finished goods are required to be in stock on an average period – 8 weeks . (d) Credit period allowed to debtors ,on average – 10 weeks . (e) Lag in payment of wages – 2 weeks . (f) Credit period allowed by creditors – 4 weeks . (g) Selling price – Rs.50 per unit . You are required to prepare an estimate of working capital requirements adding 10% margin for contingencies for a level of activity of 130000 units of production .The post A proforma cost sheet of a company provides the following particulars :- Element appeared first on Princeton Papers.
A proforma cost sheet of a company provides the following particulars :- Element of cost – 40% Raw Materials – 10% Labour – 30%
The following further particulars are available : (a) Raw materials are to remain in stores on an average – 6 weeks . (b) Processing time – 4 weeks ( assume 50% completion stage with full material consumption ). (c) Finished goods are required to be in stock on an average period – 8 weeks . (d) Credit period allowed to debtors ,on average – 10 weeks . (e) Lag in payment of wages – 2 weeks . (f) Credit period allowed by creditors – 4 weeks . (g) Selling price – Rs.50 per unit . You are required to prepare an estimate of
The post A proforma cost sheet of a company provides the following particulars :- Element appeared first on Princeton Papers.
INTRODUCTION
Proforma cost: A proforma accounting statement predicts performance over a period that hasn't yet occurred by using theoretical information or predictions about future price. Financial statements predicted for future periods are referred to as pro forma financial statements in the online Financial Accounting course.
Raw Material: Raw materials are the stock or input goods that a company needs to produce its products.
Raw materials are included as direct costs on an organization's income statement since they are engaged directly in the creation of commodities or the provision of services. Since raw material costs change with output volumes, they are regarded as variable costs.
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