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The management of bixby Food Products Limited has called for a statement showing working capital needed to finance a level of activity of 300000 units of out put for the year

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The management of bixby Food Products Limited has called for a statement showing working capital needed to finance a level of activity of 300000 units of out put for the year. The cost structure of the company’s product, for the above activity level is detailed below:

Past trends indicate the following:

1. Raw Materials are held in stock for 2 months;
2. Work-in-progress will be approximate to half a month’s production;
3. Finished goods remain in the warehouse for a month;
4. Two months’ credit is normally allowed to customers;
5. Manufacturing Expenses are expected to occur evenly during the year.

You are required calculate the investment in various current assets including a cash balance of 5% of Gross Working Capital. Your calculations & answers should be rounded off to Rupees in lakhs.