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The Colima Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2021 are 94,000 units. Colima's target ending
The Colima Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2021 are 94,000 units. Colima's target ending inventory is 8,500 units, and its beginning inventory is 7,000 units. The company's budgeted selling price to its distributors and dealers is 3,000 pesos per bicycle. Colima buys all its wheels from an outside supplier. No defective wheels are accepted. A separate division of the company orders the extra wheels Colima needs for replacement parts. The company's target ending inventory is 9,000 wheels, and its beginning inventory is 20,000 wheels. The budgeted purchase price is 500 pesos per wheel. Read the requirements. Requirement 1. Compute the budgeted revenues in pesos. Budgeted units Budgeted selling Total budgeted price per unit revenues Model XG Requirements 1. Compute the budgeted revenues in pesos. 2. Compute the number of bicycles that Colima should produce. 3. Compute the budgeted purchases of wheels in units and in pesos. 4. What actions can Colima's managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG? Print Done
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