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  3. mr. ram wishes to commence a new trading business

Mr. Ram wishes to commence a new trading business and gives the following information 1....

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Accounting

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Mr. Ram wishes to commence a new trading business and gives the following information 1. Total estimated sales per annum Rs. 6,00,000. 2. His fixed expenses are estimated at Rs. 1,000 per month and variable expenses qual to 5% of his turnover. 3. He expects to fix a selling price for each product which will be 25% in excess of his cost of purchase. 4. He expects to turnover his stock 4 times in a year 5. The sales and purchase will be evently spread throughout the year. All sales will be for cash but he expects one month's credit for purchases. Calculate : (a) His estimated profit for the year. (b) His average working capital requirements

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