A company marks-up its variable costs by 60% to get its selling price. Last year

Question

A company marks-up its variable costs by 60% to get its selling price. Last year its sales revenue was 1,744,000; all sales being made on credit. They 'turned-over' their stock 4 times, and on average their debtors took two months to make payment. They had an over-draft of 392,000 from their bank at year end. What would their bank overdraft have been if they had turned over their stock 5 times, and had their debtors paying in one month on average? (Assume all other factors remained the same and that sales were spread evenly over the year).

Explanation / Answer

the bank OD will be Euros- 193,000

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