A company is presently operating at 60% of its capacity of production and produces 45,000 units of a product annually. In 2010, the company decides to operate at 50% of its capacity at the following cost price structure and periods of block:
i.
| Estimated selling price per unit | Rs. 20.00 |
| Raw materials per unit | Rs. 7.00 |
| Wages per unit | Rs. 4.00 |
| Overhead per unit | Rs. 4.00 |
ii.
- 80% of sales are made on credit and 25% of purchases of materials are made in cash.
- Raw materials are kept in stores for 2 months, the processing time is 8 weeks and the finished goods are sold after 1 month.
- Debtors are allowed a credit period of 90 days and a credit of 60 days is received from the creditors.
- Lag in payment of wages is 1 month and overhead is 2 weeks.
Prepare a statement showing the Working Capital Requirement for the year 2010.
