The Yucatan Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2021 are 95,000 units. Yucatan​'s target ending inventory is 7,000 ​units, and its beginning inventory is 11,000 units. The​ company's budgeted selling price to its distributors and dealers is 3,500 pesos per bicycle. Yucatan buys all its wheels from an outside supplier. No defective wheels are accepted. A separate division of the company orders the extra wheels Yucatan needs for replacement parts. The​ company's target ending inventory is 14,000 ​wheels, and its beginning inventory is 16,000 wheels. The budgeted purchase price is 400 pesos per wheel. Required:
1. Compute the budgeted revenues in pesos.
2. Compute the number of bicycles that Yucatan should produce.
3. Compute the budgeted purchases of wheels in units and in pesos.
4. What actions can Yucatan's managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG?