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 company's 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: a. The finished goods inventory on hand at the end of each month must be equal to 4,050 units of Fineclay plus 20% of the next month's sales. The finished goods inventory on June 30 is budgeted to be 13,500 units. b. The raw materials inventory on hand at the end of each month must be equal to one-half of the following month's production needs for raw materials. The raw materials inventory on June 30 is budgeted to be 72,900 cc of solvent Q80. c. 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 47,250 54,000 67,500 40,500 27,000 13,500 Required: 1. Prepare a production budget for Fineclay for the months of July to October. Answer is complete and correct. Budgeted sales (units) Add: Desired ending inventory Total needs Deduct: Beginning inventory Required production DAISY PRODUCTS LIMITED Production Budget July August 47,250 54,000 14,850 17,550 62,100 71,550 13,500 14,850 48,600 56,700 September 67,500 12,150 79,650 October 40,500 9,450 49,950 12,150 37,800 17,550 62,100 2. This part of the question is not part of your Connect assignment. 3. Prepare a budget showing the quantity of solvent Q80 to be purchased for July, August, and September, and for the quarter in total. Answer is complete but not entirely correct. DAISY PRODUCTS LIMITED Raw Materials Purchases Budget July August Production needs (cc) Add: Desired ending inventory Total solvent Q80 needs Deduct: Beginning inventory Solvent Q80 purchases (cc) 145,800 170,100 85,050 93,150 230,850 263,250 72,900 85,050 157,950 178,200 Third September Quarter 186,300 502,200 56,700234,900 X 243,000 737,100 X 93,150 251,100 X 149,850 486,000