Question

Prepare the Working Capital Budget for a year for a company, making whatever assumptions that you may find necessary.
Details are as follows:
1) Sales rs. 46,80,000 : 78,000 units, 25% cash sales and balance on credit.
2) Raw material costs : 60% of sales value
3) Labor costs : rs. 6 per unit
4) Variable overheads : rs. 1 per unit
5) Fixed overheads : rs. 5,00,000 (including rs 1,10,000 as depreciation)
6) Budget stock levels:
a) Raw material : 3 weeks
b) Work in progress : 1 week (material 100% , labor and overheads 50%)
c) Finished goods : 2 weeks
7) Debtors are allowed credit for 4 weeks.
8) Creditors allow 4 weeks credit
9) Wages are paid bi-weekly ,i.e., by the 3rd week and by the 5th week for the 1st and 2nd weeks.
10) Bag in payment of overheads : 2 weeks
11) Cash in hand : rs. 50,000

Answer 1

Answer:

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