A company is currently operating at 60% of its capacity producing 36,000 units during the year 2009 at the following cost price structure:
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Rs. per unit
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Materials
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4.00
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Labour
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3.00
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Overheads (60% variable)
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3.00
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Profit
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2.00
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Selling Price
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12.00
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On 31 December 2009, the company has the following Current Assets and liabilities:
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Stock of Raw Materials
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12,000
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Stock of WIP
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21,000
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Stock of Finished Goods
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60,000
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Sundry Debtors
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72,000
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Sundry Creditors
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18,000
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Outstanding Wages
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9,000
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Outstanding Overheads
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4,500
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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.