Question

The cost sheet of Sarvesh Led. Provides the following data: Amount per unit (Rs.) Raw materials 100 Direct labour 40 Overheads 80 Selling price 240 The following is the additional information: Level of activity 1,04,000 units p.a. Raw materials in stock average 4 weeks Work-in-progress average 2 weeks Finished goods in stock average 3 weeks Credit allowed by suppliers 1month Credit allowed to customers 3 weeks Lag in payment of wages 2 weeks Minimum cash balance of Rs. 20,000 is to be maintained. Production is carried on evenly throughout the year. A safety margin of 10% will be maintained. You are required to prepare a statement showing working capital requirements of Sarvesh Ltd

Answer 1

Answer:

Amount per unit (Rs.) Raw materials 100 Direct labour 40 Overheads 80 Selling price 240 The following is the additional information: Level of activity 1,04,000 units p.a. Raw materials in stock average 4 weeks Work-in-progress average 2 weeks Finished goods in stock average 3 weeks Credit allowed by suppliers 1month Credit allowed to customers 3 weeks Lag in payment of wages 2 weeks Minimum cash balance of Rs. 20,000 is to be maintained. Production is carried on evenly throughout the year. A safety margin of 10% will be maintained. You are required to prepare a statement showing working capital requirements

Explanation:

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