Lou and Vega are the only two divisions in LV Company. Lou makes and sells motors which can either be sold to outside customers or sold to Vega. The following data are available Lou Vega Selling Price per motor to outside customers Variable Costs per motor when sold to outside customers Capacity in motors motors sold to outside customers P45 P30 12,000 6,000 Number of motors needed/month Price per motor paid to an outside supplier If Lou sells the motors to Vega, Lou can avoid P2 per motor in sales commisions 4,000 P42

Lou and Vega are the only two divisions in LV Company. Lou makes and sells motors which can either be sold to outside customers or sold to Vega. The following data are available Lou Vega Selling Price per motor to outside customers Variable Costs per motor when sold to outside customers Capacity in motors motors sold to outside customers P45 P30 12,000 6,000 Number of motors needed/month Price per motor paid to an outside supplier If Lou sells the motors to Vega, Lou can avoid P2 per motor in sales commisions 4,000 P42

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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