Assume the Exchange Rate Between the Dollar and Yen Is

question 22

Multiple Choice

Assume the exchange rate between the dollar and yen is ¥80= $1. Suppose that the exchange rate changes to ¥75 = $1. As a result of the change, there will be:

• A)more Japanese goods sold in Australia and less Australian goods sold in Japan.
• B)less Japanese goods sold in Australia and more Australian goods sold in Japan.
• C)more Japanese goods sold in Australia and the same amount of Australian goods sold in Japan.
• D)the same number of Japanese goods sold in Australia and less Australian goods sold in Japan.

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Definitions:

Direct Labor-Hours

The total hours worked by employees directly involved in the production process.

Spending Variance

This refers to the difference between the budgeted amount of spending and the actual amount spent.

Fixed Cost

A cost that does not change with an increase or decrease in the amount of goods or services produced or sold.

Variable Cost

Expenses that fluctuate directly and proportionately with changes in production volume or activity level, such as raw materials and direct labor.