Working details of Stockholm ltd for ensuring year is given belowProduction for the year69000 unitsFinished Goods in the store3 monthsRaw material in store2 monthsProduction Process1 monthCredit allowed by creditors2 monthsSelling price per unitRs50Raw material50% of selling price per unitDirect Wages10 % of selling price per unitOverheads20 % of selling priceThere is a regular production and sales cycle and wages and overheads accrued evenly , wages are paid in the next month accrual , material is introduced in the beginning of production cycle.i) Find out Working capital finance

Working capital finance refers to the cash amount which business could spend safely and it is…

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Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

Problem 2EP

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Working details of Stockholm ltd for ensuring year is given below

Production for the year	69000 units
Finished Goods in the store	3 months
Raw material in store	2 months
Production Process	1 month
Credit allowed by creditors	2 months
Selling price per unit	Rs50
Raw material	50% of selling price per unit
Direct Wages	10 % of selling price per unit
Overheads	20 % of selling price

There is a regular production and sales cycle and wages and overheads accrued evenly , wages are paid in the next month accrual , material is introduced in the beginning of production cycle.

i) Find out Working capital finance

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