Which One of the Following Statements About Inventory Prices for Foreign

question 5

Multiple Choice

Which one of the following statements about inventory prices for foreign customers is not correct -

• A)foreign prices may be entered in the inventory ledger
• B)inventory prices in the ledger may be stated only in the home currency
• C)prices may be based on the exchange rate at the time of the sale
• D)prices may be based on the exchange rate in the customer's ledger

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Definitions:

Contribution Margin

The residual amount from sales income following the deduction of variable expenses, allocated for covering fixed costs and producing profit.

Variable Costs

Expenses that vary in relation to the amount of production or business activity.

Fixed Costs

Costs that do not change with the level of output produced, such as rent and salaries.

Break-Even Point

The financial analysis term where total costs and total revenues are equal, resulting in no net loss or gain for the business.