Calculate the additional working capital requirement

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Reference no: EM13181811

A company is currently operating at 60% of its capacity producing 36,000 units during the year 2009 at the following cost price structure:


Rs. per unit

Materials

4.00

Labour

3.00

Overheads (60% variable)

3.00

Profit

2.00

Selling Price

12.00

On 31 December 2009, the company has the following Current Assets and liabilities:



Stock of Raw Materials

12,000

Stock of WIP

21,000

Stock of Finished Goods

60,000

Sundry Debtors

72,000

Sundry Creditors

18,000

Outstanding Wages

9,000

Outstanding Overheads

4,500

In the year 2010, the company wishes to operate at 80% of its capacity at the same Cost Price structure and selling price of 2009.

Calculate the additional Working Capital Requirement in the year 2010.

Reference no: EM13181811

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