Estimation of current assets, Financial Management

Assignment Help:

What is Estimation of Current Assets? Please provide me report on Estimation of Current Assets. It is about 2000 words count report on topic Estimation of Current Assets.

Related Discussions:- Estimation of current assets

., Identify and explain the key stages in the capital investment decision-m...

Identify and explain the key stages in the capital investment decision-making process and the role of investment appraisal in this process.

Pay back period (pbp) , Pay Back Period (PBP) : This is the most popula...

Pay Back Period (PBP) : This is the most popular method employed by industrial practitioners for ranking investment projects. This is described as the "period required for a pr

Reinvestment income, Other than zero coupon bonds, all fixed in...

Other than zero coupon bonds, all fixed income securities make periodic payments in the form of coupon interest. This coupon interest can be rei

Calculate the break-even point, A Video Rental store has two employees. The...

A Video Rental store has two employees. The Supervisor is paid $2,200 per month. The other employee, Mark is paid $1,200 per month. In addition, Mark is paid a commission of 20 cen

Calculation of variances, a) Distinguish among standard costing and budgeta...

a) Distinguish among standard costing and budgetary control. (b)"Calculation of variances in standard costing is not an end in itself, but a means to an end" Brief discussion

Future value, Future V alue The value of an investment is based...

Future V alue The value of an investment is based on the rate of interest paid at set time periods and at some point in the future. Future values incorporate both the i

Explain firm determines the optimal level of current assets, Explain how a ...

Explain how a firm determines the optimal level of current assets. The optimal level of working capital is defined by finding the amount that balances the requirement for liquidi

Estimate the cost of equity capital, You are required to choose a company f...

You are required to choose a company for analysis. This company should be quoted on one of the principal international exchanges. It may be your own company. You should then do

Sale of common stock on the statement of cash flows, Accrued Payroll was $1...

Accrued Payroll was $10,000 and $15,000 at the beginning and end of 20X4, respectively. The payroll expense for 20X4 totaled $520,000. Cash outflow for payroll during 20X4 totaled:

Write a report to outlining the theoretical arguments, QUESTION The Man...

QUESTION The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some t

Harry 2/14/2013 1:38:44 AM Estimation of Current Assets Current assets estimation includes: Raw materials Requirement cost This is computed by multiplying the daily requirement by the age of raw materials. Assume if the raw material cost is $5 per unit and the company expects to produce and sell 36000 units in the coming year and the age of raw materials is 45, raw materials requirement cost would be = Daily requirement x Age of raw materials. Raw Materials requirement cost = (36000 x $5 x 45) / 365 = $22,192 Work-in-Progress stock requirement cost This is computed by multiplying the daily requirement of various sub-components of WIP by the age of WIP (Work in progress). Suppose if the Raw material cost is $5 per unit and where as wages is $4 per unit and production overhead is $4 per unit and the age of WIP is 30 days, the WIP (Work in progress) stock requirement cost would be: (36000 units per year) Raw material component = 36,000 x $5 x 30 /365 = $14,795 Wages (Direct labor) Component = 36,000 x $4 x 30 / 365 = $11,836 Production overhead component = 36,000 x $4 x 30 / 365 = $11,836 Total WIP requirement cost = $38,467

Harry

2/14/2013 1:38:44 AM

Estimation of Current Assets

Current assets estimation includes:

Raw materials Requirement cost

This is computed by multiplying the daily requirement by the age of raw materials. Assume if the raw material cost is $5 per unit and the company expects to produce and sell 36000 units in the coming year and the age of raw materials is 45, raw materials requirement cost would be = Daily requirement x Age of raw materials.

Raw Materials requirement cost = (36000 x $5 x 45) / 365 = $22,192

Work-in-Progress stock requirement cost

This is computed by multiplying the daily requirement of various sub-components of WIP by the age of WIP (Work in progress). Suppose if the Raw material cost is $5 per unit and where as wages is $4 per unit and production overhead is $4 per unit and the age of WIP is 30 days, the WIP (Work in progress) stock requirement cost would be: (36000 units per year)

Raw material component = 36,000 x $5 x 30 /365 = $14,795

Wages (Direct labor) Component = 36,000 x $4 x 30 / 365 = $11,836

Production overhead component = 36,000 x $4 x 30 / 365 = $11,836

Total WIP requirement cost = $38,467

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages