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Calculate the budgeted purchases of wheels in units

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Reference no: EM132528564

Revenues, production and purchases budget

Point 1: Ducati Ltd has a division that manufactures motorised bicycles. Its budgeted sales for Model MG in 2019 is 95 000 units. Ducati's target ending inventory is 7000 units and its beginning inventory is 11 000 units. The company's budgeted selling price to its distributors and dealers is $3500 per bicycle.

 

Point 2: Ducati buys all its wheels from an outside supplier. No defective wheels are accepted. (Ducati's needs for extra wheels for replacement parts are ordered by a separate division of the company.) The company's target ending inventory is 14 000 wheels, and its beginning inventory is 16 000 wheels. The budgeted purchase price is $400 per wheel.

Required

Question 1. Calculate the budgeted revenues in dollars.

Question 2. Calculate the number of bicycles to be produced.

Question 3. Calculate the budgeted purchases of wheels in units and in dollars.

Reference no: EM132528564

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