5 Marks Question

Question

State whether the following require small or large working capital. Answer should be supported by a valid reason.

Vidyadip · Accepted Answer

S.No. Items Small/Large Working Capital Reasons 1. A company manufacturing furniture against order Small * After the completion of the order it will be sold for cash. * If furniture is manufactured as per the order; and the order cost is more than the manufacturer receives as an advance amount from the customer. 2. Woolen Garments Large * It is a seasonal product. Company manufactures and sell the products only during the winter season. * This product is to be stocked for a longer period. 3. Bread Less * The nature of the goods is perishable goods. * It cannot be stocked for longer time. It has to be sold quickly and in cash too. 4. Air coolers Large * It is a seasonal product. Company manufactures and sell the products only during the summer season. * This product is to be stocked for a longer period. 5. Sugar Large • Sugar industries generally produce during December to March. • It requires high raw material cost than the total cost. • They carry a large amount of work in progress. 6. Locomotives Small • Gestation period is small, preparing scheme for reconstruction by scaling down the liabilities, assisting and promoting industrial development.

Answer

Need a full question paper?

Explore more

Similar questions

S.No.	Items	Small/Large Working Capital	Reasons
1.	A company manufacturing furniture against order	Small	After the completion of the order it will be sold for cash. If furniture is manufactured as per the order; and the order cost is more than the manufacturer receives as an advance amount from the customer.
2.	Woolen Garments	Large	It is a seasonal product. Company manufactures and sell the products only during the winter season. This product is to be stocked for a longer period.
3.	Bread	Less	The nature of the goods is perishable goods. It cannot be stocked for longer time. It has to be sold quickly and in cash too.
4.	Air coolers	Large	It is a seasonal product. Company manufactures and sell the products only during the summer season. This product is to be stocked for a longer period.
5.	Sugar	Large	• Sugar industries generally produce during December to March. • It requires high raw material cost than the total cost. • They carry a large amount of work in progress.
6.	Locomotives	Small	• Gestation period is small, preparing scheme for reconstruction by scaling down the liabilities, assisting and promoting industrial development.

Resource Mobilization — Entrepreneurship STD 11 Commerce — Question

Answer

Need a full question paper?

Explore more

Similar questions