Your $1,000,000 Investment in Mexican Pesos Gained 4

question 1

Multiple Choice

Your $1,000,000 investment in Mexican pesos gained 4.5%. If the exchange rate moves from 18.750 pesos per dollar to 19.593 pesos per dollar over the period, what is your total return on this investment?

• A)−4.50%
• B)−2.25%
• C)0%
• D)2.25%
• E)4.50%

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Definitions:

Fixed Overhead Volume Variance

The difference between the budgeted and actual fixed overhead costs, attributed to the variance in the volume of production.

Fixed Component

A cost or part of a cost that remains unchanged regardless of changes in the level of output or activity.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity measure, like labor hours or machine hours.

Machine-Hours

A measure of production activity that quantifies the number of hours machines are operated in the production process.