If the USDollar Appreciates Relative to Foreign Currency,what Is Likely to Be

question 9

Multiple Choice

If the U.S.dollar appreciates relative to foreign currency,what is likely to be the result for the U.S.company that has company branches abroad?

• A) Profits will increase, when measured in U.S. dollars.
• B) Profits will decrease, when measured in U.S. dollars.
• C) Foreign exports to the United States will decrease.
• D) Foreign demand for U.S. goods and services will decrease.

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Production Costs

Expenses directly associated with the manufacturing of goods, including materials, labor, and overhead.

Variable Costing

A cost accounting method that includes only variable production costs in unit product costs, and treats fixed costs as period expenses that are charged against revenue in the period they are incurred.

Variable Costs

Costs that change in proportion to the level of goods or services a business produces.