A US Company's Foreign Subsidiary Had the Following Amounts in Stickles

question 91

Multiple Choice

A U.S. company's foreign subsidiary had the following amounts in stickles (§) , the functional currency, in 2011: The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2011 was §1 = $.84. At what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2011 U.S. dollar income statement?

• A) $11,253,600.
• B) $11,577,600.
• C) $11,520,000.
• D) $11,613,600.
• E) $11,523,600.

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Definitions:

Maximize Profit

The strategy of making business decisions that increase the difference between total revenue and total cost to the highest possible level.

Firm's Profit

The financial gain realized when a firm's total revenues exceed its total expenses.

Productive

refers to the ability to produce goods or services efficiently, especially in terms of output per unit of input.

Wages

Payments made to employees for their labor, typically calculated on an hourly, daily, or piecework basis.