Need help? We are here

Calculate the Working Capital requirement for a manufacturing Firm for
the Level of activity of 80,000 Units. You may assume that production is
carried on evenly throughout the year and Wages & Overhead expenses
accrue similarly and a time period of 4 weeks is equivalent to a month.
Description Amount (Rs.) Other Information
(Per Unit)
Raw materials 45 • Raw materials in stock: Two weeks
• Materials in Process: One week
• Finished Goods in stock: Two weeks
• Credit allowed by Suppliers: Half Month.
• Credit allowed to Customers: 4 weeks.
• Overheads Two weeks
Direct labor 20
Overheads 37.5
Total Cost 102.5
Profit 22.5
Selling price 125
Cask at Bank is expected to be Rs. 40,000. Also 80
% of the sales are
credit sales for the firm. Any other data if required may be assumed.