In Some Developing Countries, Different Exchange Rates Apply to Different

question 73

Multiple Choice

In some developing countries, different exchange rates apply to different categories of transaction, and therefore _____

• A) the local currency is not easily convertible to foreign currency.
• B) the local currency is very easily convertible to foreign currency.
• C) the prices of foreign goods fluctuate widely in domestic markets.
• D) the prices of domestic goods fluctuate widely in foreign markets.
• E) domestic investors are more inclined to invest in foreign assets.

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Definitions:

Departmental Overhead Rate Method

A calculation used in cost accounting to allocate overhead expenses to specific departments based on their respective share of direct costs or activity levels.

Allocation Base

A criterion or measure, such as direct labor hours or machine hours, used for allocating costs among multiple cost objects.

Allocation Base

A criterion or standard used to allocate costs among different cost objects, like departments or products.

Overhead Rate

is a calculation that determines how much of overhead cost should be allocated to each unit of production or service, commonly based on direct labor hours, machine hours, or other activity drivers.