Table 141Hypothetical Costs of Producing an Automobile for Toyota Inc

question 1

Multiple Choice

Table 14.1.Hypothetical Costs of Producing an Automobile for Toyota Inc.of Japan

-Refer to Table 14.1.Assume that Toyota Inc.obtains all of its automobile inputs from Japanese suppliers.If the yen's exchange value appreciates from 200 yen = $1 to 100 yen = $1,the yen cost of a Toyota automobile equals:

• A) 4,000,000 yen
• B) 6,000,000 yen
• C) 8,000,000 yen
• D) 10,000,000 yen

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much revenue contributes to covering fixed costs.

Variable Selling Expense

Expenses that fluctuate in direct proportion to sales volume, including commissions and freight fees.

Fixed Manufacturing Overhead

Expenses related to manufacturing that remain constant regardless of the number of units produced, including property taxes and rent for factory buildings.

Direct Labour

The work performed by individuals directly involved in the manufacturing of products or providing services, whose costs are directly attributable to the products or services.