Zebra Enterprises is in the business of manufacturing iron buckets. The firm is headquatered in Gurgaon and supplies materials across India. The selling price of each bucket is Rs 130. The cost per bucket is 110.5 (which includes Raw material = Rs 52, Direct labor = Rs19.5, Overheads= Rs39). Average raw material in stock for 30 days, average materials in process is 15days, finished goods lie in the stock for 30 days before being sold. Credit allowed by suppliers of raw materials is 30 days and the credit allowed to debtors is 60 days. Time lag in the payment of wages is 10 days and for overheads is 30 days. 25% of the sales are on cash basis. Cash balance is expected to be Rs1,20,000. Estimate the Working Capital required for a level of activity of 70000 units of output annually. Assume production is carried out evenly during the year and there are 360 days in the year.
Zebra Enterprises is in the business of manufacturing iron buckets. The firm is headquatered in Gurgaon and supplies materials across India. The selling price of each bucket is Rs 130. The cost per bucket is 110.5 (which includes Raw material = Rs 52, Direct labor = Rs19.5, Overheads= Rs39). Average raw material in stock for 30 days, average materials in process is 15days, finished goods lie in the stock for 30 days before being sold. Credit allowed by suppliers of raw materials is 30 days and the credit allowed to debtors is 60 days. Time lag in the payment of wages is 10 days and for overheads is 30 days. 25% of the sales are on cash basis. Cash balance is expected to be Rs1,20,000. Estimate the Working Capital required for a level of activity of 70000 units of output annually. Assume production is carried out evenly during the year and there are 360 days in the year.
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Zebra Enterprises is in the business of manufacturing iron buckets. The firm is headquatered in Gurgaon
and supplies materials across India. The selling price of each bucket is Rs 130. The cost per bucket is 110.5
(which includes Raw material = Rs 52, Direct labor = Rs19.5, Overheads = Rs39). Average raw material in
stock for 30 days, average materials in process is 15days, finished goods lie in the stock for 30 days before
being sold. Credit allowed by suppliers of raw materials is 30 days and the credit allowed to debtors is 60
days. Time lag in the payment of wages is 10 days and for overheads is 30 days. 25% of the sales are on
cash basis. Cash balance is expected to be Rs1,20,000. Estimate the Working Capital required for a level of
activity of 70000 units of output annually. Assume production is carried out evenly during the year and
there are 360 days in the year.
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