From the following information prepare a statement showing the estimated working capital requirement: (1)Projected annual sales 36,000 units (2)Analysis of sales Raw materials Rs. 6 per unit Labour Rs. 4 per unit Overhead Rs. 3 per unit Profit Rs. 2 per unit Selling price Rs. 15 per unit (3)Additional Information : (a) Raw material in stock 1 month (b)Production process 2 months (c) Finished goods in store 3 months (d)Credit allowed to debtors 4 months (e) Credit allowed by suppliers 2 months (f) Monthly wages and expenses are paid twice on 1st and 16th of each month. (g)Production is carried on evenly during the year and expenses and wages accrue similarly. (h)Cash is to be kept at 10% of the net working capital
From the following information prepare a statement showing the estimated working capital requirement: (1)Projected annual sales 36,000 units (2)Analysis of sales Raw materials Rs. 6 per unit Labour Rs. 4 per unit Overhead Rs. 3 per unit Profit Rs. 2 per unit Selling price Rs. 15 per unit (3)Additional Information : (a) Raw material in stock 1 month (b)Production process 2 months (c) Finished goods in store 3 months (d)Credit allowed to debtors 4 months (e) Credit allowed by suppliers 2 months (f) Monthly wages and expenses are paid twice on 1st and 16th of each month. (g)Production is carried on evenly during the year and expenses and wages accrue similarly. (h)Cash is to be kept at 10% of the net working capital
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
From the following information prepare a statement showing the estimated
(1)Projected annual sales 36,000 units
(2)Analysis of sales
Raw materials Rs. 6 per unit
Labour Rs. 4 per unit
Profit Rs. 2 per unit
Selling price Rs. 15 per unit
(3)Additional Information :
(a) Raw material in stock 1 month
(b)Production process 2 months
(c) Finished goods in store 3 months
(d)Credit allowed to debtors 4 months
(e) Credit allowed by suppliers 2 months
(f) Monthly wages and expenses are paid twice on 1st and 16th of each month.
(g)Production is carried on evenly during the year and expenses and wages accrue
similarly.
(h)Cash is to be kept at 10% of the net working capital.
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