A US Company Would Invest in Export Credit Insurance When It

question 9

Multiple Choice

A U.S. company would invest in export credit insurance when it

• A) is exposed to the risk that an importer may default on payment.
• B) is dealing in a country that has a nonconvertible currency.
• C) is unable to obtain any pre-export financing.
• D) has received a letter of credit from the importer's bank.
• E) has to enter a barter-like agreement.

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Definitions:

Flexible Factory Overhead Budget

A budget that adjusts overhead costs in response to changes in actual production or activity, allowing for more accurate costing.

Direct Materials Price Variance

The difference between the actual price and the standard price of direct materials multiplied by the actual quantity of direct materials used in producing a product.

Units

In business and accounting, units refer to the individual pieces or quantities of a product or service.

Variable Factory Overhead

Refers to the indirect, variable costs that change with the level of production output, such as utilities for the manufacturing plant.