=+Woolmark Manufacturings blue rugs are very popular and demand is high but, because of capacity constraints, the

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=+Woolmark Manufacturing’s blue rugs are very popular and demand is high but, because of capacity constraints, the firm will produce only 200000 blue rugs per year. The budgeted selling price is $2000 each. There are no rugs in beginning inventory.

Target ending inventory of rugs is also zero.

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