The summary of per unit cost of production of a product of A & Co. is as under: Raw material cost ₹25 Labour and other manufacturing cost ₹35 Factory expenses ₹10 Office expenses ₹20 Depreciation on machinery is ₹5 f
CS Professional · Banking - Law and Practice · PYQS · December 2014
The summary of per unit cost of production of a product of A & Co. is as under: Raw material cost ₹25 Labour and other manufacturing cost ₹35 Factory expenses ₹10 Office expenses ₹20 Depreciation on machinery is ₹5 for a production capacity of 25,000 units per month. The optimum batch quantity is 5,000 units with a work cycle of 1 week. The credit available for raw materials is 2 weeks. Sales are 20% in cash and the remaining on credit with an average period of 30 days' credit. Holding period of stock of finished goods is 15 days. The article is sold for ₹105 and average sales for the next year is estimated at 17,000 units per month. The proprietor wants to avail of working capital limits from the bank. Guide him as to what limits he should apply?
Topics: Working Capital Management
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