Scribd
Upload
114 views2 pages

Working Capital

1. The company needs working capital to finance 1,04,000 units of production based on: materials costing Rs. 80/unit, labor Rs. 30/unit, overheads Rs. 60/unit. Production and sales are evenly distributed throughout the year. 2. The cash budget is to be prepared for April-June 2014 based on: expected cash of Rs. 32,000 on 4/1/2014, sales and expenses for Feb-June, credit terms, and income tax payment of Rs. 28,000 in June. 3. To calculate the operating cycle duration, use: raw materials Rs. 20,000, work in process Rs. 14,000, finished goods Rs.

Uploaded by

k.hgj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
114 views2 pages

Working Capital

1. The company needs working capital to finance 1,04,000 units of production based on: materials costing Rs. 80/unit, labor Rs. 30/unit, overheads Rs. 60/unit. Production and sales are evenly distributed throughout the year. 2. The cash budget is to be prepared for April-June 2014 based on: expected cash of Rs. 32,000 on 4/1/2014, sales and expenses for Feb-June, credit terms, and income tax payment of Rs. 28,000 in June. 3. To calculate the operating cycle duration, use: raw materials Rs. 20,000, work in process Rs. 14,000, finished goods Rs.

Uploaded by

k.hgj
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

1.

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


Elements of cost Per unit(Rs)
Materials 80
Direct labour 30
Overheads 60
Total cost 170
Profit 30
Selling price 200
The following further particulars are available:
i) Raw materials are in stock on an average for one month ii) Raw materials are in process on
an average for half a month iii)Finished goods are in stock on an average for one month iv)
Credit allowed by suppliers is one month v) Lag in payment of wages is 1 ½ weeks vi) Lag in
payment of overheads is one month vii) ¼ Output is sold against cash viii) Cash in hand and at
bank is expected to be Rs.25,000 ix) Credit allowed to customers is two months
You are required to prepare a statement showing the working capital needed to finance level
of activity of 1,04,000 units of production.
You may assume that production is carried on evenly throughout the year, wages and
overheads accrue similarly and a time period of 4 weeks is equivalent to a month.

2. A Company is expecting to have Rs 32000 cash in hand on 1/4/2014 and it requests


you to prepare cash budget for three months, April to June 2014. The following
information is supplied to you
Month Sales (Rs) Purchases Wages( Rs) Expenses
(Rs) (Rs)
February 70,000 44000 6000 5000
March 80,000 56000 9000 6000
April 96,000 60000 9000 7000
May 1,00000 68000 11000 9000
June 1,20,000 62000 14000 9000

Other information
a. Period of credit allowed by suppliers its two months
b. 25% of sales is for cash and the period of credit allowed to customers for credit is one
month
c. Delay in payment of wages and expenses one month
d. Income tax Rs 28000 is to be paid in june 2014.
From the following data, compute the duration of the operating cycle. Assume 360 days per
year. may take one year as equal to 365 days
3.
Particulars Amount
Stocks:
Raw materials 20,000
Work in process 14,000
Finished goods 21,000
Purchase of raw materials 96,000
Cost of goods sold 1,40,000
Sales 1,60,000
Debtors 32,000
Creditors 16,000

4. The following information is available for Swagat Ltd


Particulars Rs.(Million)
Average stock of raw material and stores 200
Average work in process inventory 300
Average finished goods inventory 180
Average accounts receivable 300
Average accounts payable 180
Average raw material and stores purchased on credit 10
and consumed per day
Average work-in-process value of raw materials 12.5
committed per day
Average cost of goods sold per day 18
Average sales per day 20
You are required to calculate duration of operating cycle

You might also like