Financial Management Problem
Calculate the Working Capital requirement for a manufacturing Firm for the Level of activity of 80,000 Units. You may assume that production is carried on evenly throughout the year and Wages & Overhead expenses accrue similarly and a time period of 4 weeks is equivalent to a month.
Description Amount (Rs.) Other Information
(Per Unit)
Raw materials 45
o Raw materials in stock: Two weeks
o Materials in Process: One week
o Finished Goods in stock: Two weeks
o Credit allowed by Suppliers: Half Month.
o Credit allowed to Customers: 4 weeks.
o Overheads Two weeks
Direct labor 20
Overheads 37.5
Total Cost 102.5
Profit 22.5
Selling price 125
Cask at Bank is expected to be Rs. 40,000. Also 80% of the sales are credit sales for the firm. Any other data if required may be assumed.
The response should include a reference list. Using one-inch margins, Times New Roman 12 pnt font, double-space and APA style of writing and citations.