Cost sheet, Financial Management

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

 

RO

Cost (per unit)

 

   Raw materials

52.0

   Direct Labour

19.5

   Overheads

39.0

Total Cost (per unit)

110.5

Profit

19.5

Selling Price

130.0

The following is the additional information available:

Average raw material in stock              :           One Month

Average materials in process               :           Half Month

Credit allowed by suppliers                  :           One Month

Credit allowed to debtors                    :           Two Month

Time lag in payment of wages             :           10 Days

Overhead                                         :           One Month

One fourth of sales are cash basis.

Cash balance in expected to be RO 120,000/-.

(Month = 30 Days)

You are requested 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.

 

Posted Date: 2/19/2013 7:24:48 AM | Location : United States







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