From the following particulars workout the amount of working capital Required:
Elements of cost
Raw materials
8
Direct labour
2
Overheads
6
Total cost
16
Profit
4 4
Selling price
Amount per unit
20
(1) (2) Raw materials are in stock, on an average 1 month. Materials are in process, on an average half a month.
(3) Finished goods are in stock on an average 6 weeks
(4) Credit allowed by creditors is one month, Credit allowed to debtors is 2 months.
(5) Lag in payment of wages is 1.5 weeks.