Daisy Products Limited of Shenzhen, China, manufactures and distributes toys throughout Southeast Asia. Three cubic centimetres (cc) of solvent Q80 are required to manufacture each unit of Fineclay, one of the companys products. The company is now planning raw materials needs for the third quarter, the quarter in which peak sales of Fineclay occur. To keep production and sales moving smoothly, the company has the following inventory requirements:

1. The finished goods inventory on hand at the end of each month must be equal to 2,550 units of Fineclay plus 20% of the next months sales. The finished goods inventory on June 30 is budgeted to be 8,500 units.
2. The raw materials inventory on hand at the end of each month must be equal to one-half of the following months production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 45,900 cc of solvent Q80.
3. The company maintains no work-in-process inventories.

A sales budget for Fineclay for the last six months of the year follows:

July August September October November December Budgeted Sales in Units 29,750 34,000 42,500 25,500 17,000 8,500 Required: 1. Prepare a production budget for Fineclay for the months of July to October. DAISY PRODUCTS LIMITED Production Budget July August 29.750 34,000 September 42,500 October 25,500 Budgeted sales (units) Add: Desired ending inventory Total needs Deduct: Beginning inventory Required production 3. Prepare a budget showing the quantity of solvent Q80 to be purchased for July, August, and September, and for the quarter in total. DAISY PRODUCTS LIMITED Raw Materials Purchases Budget July August September Third Quarter Total solvent Q80 needs