6.5 Lewisham Ltd manufactures one product line - the Zenith. Plans over the next few months are as follows: 1 Sales demand Units July 180,000 August 240,000 September 200,000 October 180,000 Each Zenith will sell for 3. 2 Receipts from sales. Payments from credit customers are expected to be 70 per cent during the month of sale, and 28 per cent during the following month. The remaining trade receivables 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. These are expected to be 40,000 units at 1 July. The busi- ness'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. These are expected to be 40,000 kg on 1 July. The busi- ness'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 0.5 kg of the raw material, which costs 1.50/kg. Raw materials purchases are paid in the month after purchase. 5 Labour and overheads. The direct labour cost of each Zenith is 0.50. The variable overhead element of each Zenith is 20.30. Fixed overheads, including depreciation of 25,000, total 47,000 a month. All labour and overheads are paid during the month in which they arise. 6 Cash in hand. At 1 August the business plans to have a bank balance (in funds) of 20,000 Required: Prepare the following budgets: (a) Finished inventories budget (expressed in units of Zenith) for each of the three months July, August and September. (b) Raw materials inventories budget (expressed in kilograms of the raw material) for the two months July and August (c) Cash budget for August and September