The Yoshida Co. in Japan has a division that manufactures two- wheel motorcycles. Its budgeted sales for Model G in 2013 is 895,000 units. Yoshida’s target ending inventory is 90,000 units, and its beginning inventory is 120,000 units. The company’s budgeted selling price to its distributors and dealers is 405,000 yen (¥) per motorcycle.

Yoshida buys all its wheels from an outside supplier. No defective wheels are accepted. (Yoshida’s needs for extra wheels for replacement parts are ordered by a separate division of the company.) The company’s target ending inventory is 74,000 wheels, and its beginning inventory is 56,000 wheels. The budgeted purchase price is 12,000 yen (¥) per wheel.

Required

1. Compute the budgeted revenues in yen.

2. Compute the number of motorcycles that Yoshida should produce.

3. Compute the budgeted purchases of wheels in units and in yen.

4. What actions can Yoshida’s managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model G?