Lewisham Ltd manufactures one product line – the Zenith. Sales of Zeniths over the next few months are planned as follows:

1 Demand units July 180,000 August 240,000 September 200,000 October 180,000 Each Zenith sells for £3.

2 Debtor receipts Credit customers (receivables) are expected to pay as follows:

70% during the month of sale 28% during the following month The remainder of the credit customers are expected to go bad (that is, to be uncollectable).

Credit customers who pay in the month of sale are entitled to deduct a 2 per cent discount from the invoice price.

3 Finished goods inventories Inventories of finished goods are expected to be 40,000 units at 1 July. The business’s policy is that, in future, the inventories at the end of each month should equal 20 per cent of the following month’s planned sales requirements.

4 Raw materials inventories Inventories of raw materials is expected to be 40,000 kg on 1 July. The business’s policy is that, in future, the inventories at the end of each month should equal 50 per cent of the following month’s planned production requirements. Each Zenith requires