A company is currently operating at 80 of its capacity

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Reference no: EM13379452

A company is currently operating at 80% of its capacity producing 48,000 units per year at the following Cost Price structure:


Rs. per unit

Materials

5.00

Labour

3.00

Overheads (including depreciation of Rs. 500 per week)

2.00

Selling Price

12.00

Other information:

  1. 80% of sales are made on credit and 40% of purchases are made in cash.
  2. Materials are kept in store for 6 weeks, the processing time is 8 weeks and the finished goods are stored in godown for 90 days.
  3. Debtors are allowed a credit period of 10 weeks and a credit period of 45 days is received from the creditors.
  4. Lag in payment of wages and overheads are 3 weeks and 15 days, respectively.

Prepare the Working Capital forecasting statement of the company.

Reference no: EM13379452

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