Brisco Bricks Purchases Raw Material from Its Foreign Supplier, Bolivian

question 83

Multiple Choice

Brisco Bricks purchases raw material from its foreign supplier, Bolivian Clay, on May 8. Payment of 2,000,000 foreign currency units (FC) is due in 30 days. May 31 is Brisco's fiscal year-end. The pertinent exchange rates were as follows:

How much US $will it cost Brisco to finally pay the payable on June 7?

• A) $1,666,667.
• B) $2,440,000.
• C) $2,520,000.
• D) $2,500,000.
• E) $2,400,000.

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Definitions:

Fixed Cost

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance.

Average Cost

The total cost divided by the quantity produced, calculating the cost on a per unit basis.

Total Output

The total quantity of goods or services produced by a firm or economy.

Fixed Costs

Expenses that do not change with the level of goods or services produced by a business.