When the Dollar "Cost" of a Unit of Foreign Currency

question 11

Multiple Choice

When the dollar "cost" of a unit of foreign currency falls, the dollar is _____ against the foreign currency.

• A) depreciating
• B) appreciating
• C) equalizing
• D) holding its own

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Definitions:

Step-fixed Costs

Expenses that remain constant over a range of production but can change when production exceeds certain levels.

Inflationary Price Increase

A rise in prices across the board that is often attributed to an increase in the money supply or demand outpacing supply.

Absorption Costing

An accounting method that includes all manufacturing costs (direct materials, direct labor, and both variable and fixed overhead) in the cost of a product.

Variable Costs

Additional costs incurred when unit production increases. Variable costs per unit usually are assumed not to vary with volume.