The Monterey Co$.$ in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in $2021$ are $93$ comma $000$ units. Monterey$\text{'}$s target ending inventory is $8$ comma $000$units$,$ and its beginning inventory is $6$ comma $000$ units. The$$ company's budgeted selling price to its distributors and dealers is $3$ comma $300$ pesos per bicycle. Monterey buys all its wheels from an outside supplier. No defective wheels are accepted. A separate division of the company orders the extra wheels Monterey needs for replacement parts. The$$ company's target ending inventory is $18$ comma $000$wheels$,$ and its beginning inventory is $12$ comma $000$ wheels. The budgeted purchase price is $700$ pesos per wheel.

Read the requirementsLOADING....

Question content area bottom

Part $1$

Requirement $1.$ Compute the budgeted revenues in pesos.

Budgeted units

Budgeted selling price per unit

Total budgeted revenues

Model XG

$93,000$

$3,300$

$306,900,000$

Part $2$

Requirement $2.$ Compute the number of bicycles that Monterey should produce.

Budgeted sales in units

$93,000$

Add target ending finished goods inventory

$8,000$

Total required units

$101,000$

Deduct beginning finished goods inventory

$6,000$

Units of finished goods to be produced

$95,000$

Part $3$

Requirement $3.$ Compute the budgeted purchases of wheels in units and in pesos.

Direct materials to be used in production $-$ number of wheels

$190,000$

Add target ending inventory $-$ number of wheels

$18,000$

Total requirement $-$ number of wheels

$208,000$

Deduct beginning inventory $-$ number of wheels

$12,000$

Purchases to be made $-$ number of wheels

$196,000$

Cost per wheel in pesos

$700$

Purchases cost in pesos

$137,200,000$