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Luminant Productions produces light fittings from a small factory unit. The company’s directors have just met to discuss the sales budget and related matters for the next quarter, and have come up with the following figures for projected sales: Units July 2013 8600 August 2013 8200 September 2013 9000 Opening inventory of finished goods at 1 July 2013 is expected to be 6000 units. The directors feel that they keep too many units in inventory and they intend to reduce it to more reasonable levels over the next few months. They plan to reduce opening inventory by 500 units each month after July 2013. Each light fitting unit uses £2 of raw materials. Raw materials inventory at 1 July is estimated to have a value of £2800. The directors wish to increase that inventory level slightly over the next few months, as there is a danger of running out of inventory to transfer to production. £ Opening inventory at 1 August should be: 3000 Opening inventory at 1 September should be: 3100 Opening inventory at 1 October should be: 3200 Calculate for each of the 3 months: a) The production budget (in units). b) The raw material purchases budget (in £s).
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