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The following information is extracted from its accounts of a company
(i) Sales at ( 2 months credit) = 20,00,000
(ii) Raw Material = 5,00,000
(iii) Wages paid (1 month in arrear) = 4,20,000
(iv) Manufacturing expenses outstanding (1 month in arrear) = 6,00,000
(v) Total administrative expenses (1 month in arrear) = 2,40,000The company keeps 1 months stock each of raw material and maintains 2 months stock of raw material and 1 months finished goods. Cash balance is maintained at Rs 100000. Assuming a 10% safety margin, ascertain the requirements of Working Capital of the company on cash cost basis?
There is no point in asking this in the general forum – you should ask in the forum for the relevant ACCA paper.
(Also, do not simply set test questions and expect an answer. You must have an answer in the same book in which you found the question (if not then you should be using a different book) and so you should ask about whatever it is in the answer that is puzzling you).
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