A company is currently operating at 80% of its capacity producing 48,000 units per year at the following Cost Price structure:
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Rs. per unit
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Materials
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5.00
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Labour
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3.00
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Overheads (including depreciation of Rs. 500 per week)
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2.00
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Selling Price
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12.00
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Other information:
- 80% of sales are made on credit and 40% of purchases are made in cash.
- 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.
- Debtors are allowed a credit period of 10 weeks and a credit period of 45 days is received from the creditors.
- Lag in payment of wages and overheads are 3 weeks and 15 days, respectively.
Prepare the Working Capital forecasting statement of the company.