Find the Net Exposure of the MNC with the Following

question 27

Multiple Choice

Find the net exposure of the MNC with the following intra affiliate transactions shown.

• A)$55
• B)$65
• C)$800
• D)none of the above

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Definitions:

Common Fixed Expenses

Common fixed expenses refer to the overhead costs not directly linked to production or sales volume, shared across different departments or product lines.

Absorption Costing

An approach in accounting where the cost of a product is determined by including direct materials, direct labor, and all manufacturing overhead costs, whether variable or fixed.

Unit Product Cost

The total cost to produce one unit of product, including direct materials, direct labor, and allocated overhead.

Contribution Margin Ratio

A financial metric that shows what percentage of sales revenue is not consumed by variable costs and therefore contributes to covering fixed costs.