In 1985, the Exchange Rate Between the U

question 305

Multiple Choice

In 1985, the exchange rate between the U.S. dollar and the Japanese yen was $1 = 262 yen; in 2003, the rate was $1 = 110 yen. Which one of the following might be a plausible explanation for the change in the dollar-yen exchange rate from 1985 to 2003?

• A)Japan exported much more to the United States during this period than it imported from the United States.
• B)Japan greatly increased its purchases of military equipment from the United States during this period.
• C)Japan's economy grew far faster than the U.S. economy during this period.
• D)Japan's government devalued the yen during this period.

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Definitions:

Standard Cost Card

A document that lists the standard costs associated with producing a product, including materials, labor, and overhead rates.

Direct Labor Hour

Direct labor hour refers to the time spent by workers directly involved in the production of goods or services.

Overhead Applied

A portion of overhead costs assigned to a particular cost object based on a predetermined rate.

Direct Labor Efficiency Variance

The difference between the budgeted amount of direct labor required to produce an output and the actual direct labor used.