A proforma cost sheet of a company provides the following data:

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Presentation transcript:

A proforma cost sheet of a company provides the following data: Cost (per Unit) Raw Materials 52.0 Direct Labour 19.5 Overheads 39 Total cost(per unit) 110.5 Profit Selling price 130

The following is the additional information available: Average raw material in stock: one month Average materials in process : half a month Credit allowed by suppliers: one month Credit allowed to debtors: two months Time lag in payment of wages one & half weeks. Overheads: one month One-fourth of sales are on cash basis. Cash balance is expected to be Rs.1,20,000 You are required to prepare a statement showing the working capital needed to finance a level of activity of 70,000 units of output. You may assume that production is carried on evenly throughout the year and wages and overheads accrue similarly.

A proforma cost sheet of a company provides the following particulars: Elements of cost: Materials 40% Direct Labor 20% Overheads 20% The following further particulars are available: It is proposed to maintain a level of activity of 2,00,000 units. Selling price is Rs.12/- per unit. Raw Material are expected to remain in stores for an average period of one month.

4. Materials will be in process, on averages half a month. 5 4. Materials will be in process, on averages half a month. 5. Finished goods are required to be in stock for an average period of one month. 6. Credit allowed to debtors is two months. 7. Credit allowed by suppliers is one month. 8. Expenses and Overheads are paid 1 month lag.