estimate working capital
From the following information of ACX Co., ltd for the next year, you are required to estimate the working capital needed to finance a level of activity of 2,08,000 units of production after adding a 5 percent safety contingency.
Cost per unit (Rs.) Raw materials 160 Direct labour 60 Overheads (including depreciation of Rs.10) 130 Total cost 350 Profit 50 Selling price 400
Additional Information:
Average raw materials in stock: one month
Average materials-in-process (50 percent completion state) half-a-month Average finished goods in stock: one month
Credit allowed by suppliers: one month
Credit allowed to customers: two months
Time lag in payment of wages: one-and-half-week
Time lag in payment of overheads: one-week
All sales assume that production is carried on evenly throughout the year and wages and overheads expenses accrue similarly.
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How to solve this?
per per unit Fantastic Ltd. provides the following budget figure for the next year: Budgeted Production 2,60,000 units per annum Raw Material Rs. 100 per unit Labour Rs. 50 per unit Overheads (Including Depreciation Rs. 10 Rs. 40 unit per unit) Total Cost Rs. 190 per unit Profit Rs. 60 per unit Selling Price Rs. 250 Raw material is in stock, on average for 4 weeks. Materials are in process, on average for 2 weeks. Finished...
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Q 3. Prepare the cash budget of the company from January to June based on the following (15) information.(Rs.in lakh) Production Overheads 6.000 Month January February March April May June Sales 72.000 97,000 86,000 88,600 102,500 108,700 Material Purchases 25,000 31,000 25,500 30.600 37,000 38,800 Salaries & wages 10,000 12.100 10.600 25.000 22.000 23.000 6,300 6,000 6,500 8,000 8,200 Office & Sedligads 5,500 6.700 7.500 8.900 11,000 11,500 The opening cash balance for the year may be taken as Rs.72,500...
(10) The following information is available for ACCESS Itd. 105 days Creditors payment period 75 days Credit sales for the year Rs.300 lakh Raw material consumed Rs. 120lakh Cost of production Rs.210lakh Cost of sales Rs.240lakh Average stock of raw materials Rs.35lakh Average stock of work-in-progress Rs.10lakh Average stock of finished goods Rs.30lakh Opening balance of accounts receivable Rs.15lakh in a year,
6. A newly formed company has applied for a loan to a bank for financing its working capital requirements. You are requested by the Bank to prepare an estimate of the requirements of the working capital for the company. Add 10% to your estimates to cover unforeseen situations. Information on the Profit & Loss of the company: (15) Sales 21,00,000 Cost of Goods Sold 15,30,000 Gross Profit 5,70,000 Less: Administrative exps 1,40,000 Selling exps 1,30,000 2,70,000 Profit Before Tax 3,00,000...
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