A proforma cost sheet of a company provides the following particulars :- Element of cost – 40% Raw Materials – 10% Labour – 30% The following further particulars are available : (a) Raw materials are to remain in stores on an average – 6 weeks . (b) Processing time – 4 weeks ( assume 50% completion stage with full material consumption ). (c) Finished goods are required to be in stock on an average period – 8 weeks . (d) Credit period allowed to debtors ,on average – 10 weeks . (e) Lag in payment of wages – 2 weeks . (f) Credit period allowed by creditors – 4 weeks . (g) Selling price – Rs.50 per unit . You are required to prepare an estimate of working capital requirements adding 10% margin for contingencies for a level of activity of 130000 units of production .
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