The working capital requirement from the information given below will be:

Budgeted Production                                  1, 56,000 units per annum

Raw material Consumption                        90/- per unit

Direct Labour                                               40/- per unit

Overheads                                                   75/- per unit

Profit                                                             60/- per unit

Sales                                                            265/- per unit

It is estimated that:

Raw material are carried in stock for 1 month, finished goods for 1 month,  work-in-progress will take 2 weeks (with 100% material, 50% Labour and overheads), suppliers will give 1 month credit and customers will require 2 months credit. Lag in payment of wages: 1and ½ weeks, Lag in payment of overheads: 1month

20% of the sales are for cash. Cash in hand is expected to be: Rs. 60,000/- (Assume 1 month= 4 weeks)