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per per unit Fantastic Ltd. provides the following budget figure for the next year: Budgeted Production 2,60,000 units per an

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Statement showing Working Capital Requirement
Particulars Amount(Rs)
A. Current assets
1. Stock of Raw materials for 4 weeks (260,000*Rs.100*4/52) 2,000,000
2. Work-in-progress for 2 weeks: 1,400,000
a. Material (260,000*Rs.100*2/52*100%) = 1,000,000
b. Labour (260,000*Rs.50*2/52*50%) = 250,000
c. Overheads (260,000*Rs.30*2/52*50%) = 150,000
3. Finished goods for 6 weeks (260,000*Rs.190*6/52) 5,700,000
4. Debtors for 8 weeks (260,000*Rs.250*8/52) 10,000,000
5. Cash in hand and bank 50,000
Total (A) 19,150,000
B. Current liabilities
1. Creditors 5 week's purchase of raw materials (260,000*Rs.100*5/52) 2,500,000
2. Labour (260,000*Rs.50*1.5/52) 375,000
3. Overheads (260,000*Rs.30*1/52) 150,000
Total (B) 3,025,000
Working capital (A-B) 16,125,000
Add: Contingencies (16,125,000*5%) 806,250
Total Requirement for Working Capital 16,931,250

NOTES:

a.) Overheads cost is to be taken excluding non-cash expense i.e. deprectiation (40 - 10 = 30).

b.) One year = 52 weeks

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