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    1.Delphi Switch and Signal sold equipment to a Canadian
    transportation company at a price of 150,000 Canadian dollars with
    payment due in 60 days. On the date of sale the exchange rate was
    1.50 Canadian dollars per U.S. dollar. Delphi decided to hedge the
    risk of currency fluctuations by purchasing 150,000 Canadian
    dollars with payment due in 60 days. If the exchange rate in 60
    days is 1.25 Canadian dollars per U.S. dollar, Delphi Switch and
    Signal will:
    a. Recognize a net gain of $20,000 on the two transactions.
    b. Recognize a $20,000 gain when it collects the receivable and
    incur a $20,000 loss when it pays the liability.
    c. Incur a $20,000 loss when it collects the receivable and
    recognize a $20,000 gain when it pays the liability.
    d. Incur a net loss of $20,000 on the two transactions.
    2.Precision Instruments sold equipment to a British research group at
    a price of 50,000 British pounds on December 1, 2000, with payment
    due in 90 days. Using the following exchange rates, compute the
    gain or loss from currency fluctuations that Precision Instruments
    should recognize in 2000 and 2001.

    Dec. 1, 2000 $1.75 per British pound
    Dec. 31, 2000 $1.80 per British pound
    Mar. 1, 2001 $1.76 per British pound

    a. $2,500 loss in 2000; $2,000 gain in 2001.
    b. No gain or loss in 2000; $500 loss in 2001.
    c. $2,500 gain in 2000; $2,000 loss in 2001.
    d. No gain or loss in 2000; $500 gain in 2001

    Use the following to answer questions 28-29.
    The following information has been taken from the perpetual
    inventory system of Dart Mfg. Co. for the month ended July 31:

    Purchases of direct materials $27,000
    Direct materials used 30,000
    Wages paid to direct workers during the month 8,000
    Direct labor costs assigned to production 10,000
    Manufacturing overhead costs incurred (and applied) 20,000

    Balances in inventory July 31 July 1
    Materials $ ? $43,000
    Work in Process 13,000 10,000
    Finished Goods 85,000 80,000

    3. Refer to the above data. The total amount of inventory to be
    included in Dart's July 31 balance sheet amounts to:
    a. $138,000.
    b. $98,000.
    c. $85,000.
    d. Some other amount.
    4. Refer to the above data. The overhead application rate, assuming
    that overhead is applied to production as a percentage of direct labor
    costs, is:
    a. 250%.
    b. 200%.
    c. 50%.
    d. 40%.
    5. If estimated manufacturing overhead costs are $450,000 and
    estimated direct labor hours, which have a causal effect on
    manufacturing overhead costs, are 90,000, what is the overhead
    application rate?
    a. $5 per labor hour
    b. $9 per labor hour
    c. $5 per hour of manufacturing overhead
    d. None of the above
    6.Which of the following do not represent a type of inventory to
    General Motors?
    a. Completed automobiles awaiting sale
    b. Raw materials and component parts awaiting use in the
    manufacturing process.
    c. Automobiles that are only partially completed at the end of the
    accounting period
    d. None of the above
    7. The "net purchases" acquired by a merchandising company
    correspond most closely to which of the following items applicable to
    a manufacturing company?
    a. Cost of goods available for sale.
    b. Cost of finished goods manufactured.
    c. Cost of goods sold.
    d. Total manufacturing costs incurred during the production
    process.

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    https://brainmass.com/business/foreign-exchange-rates/business-analysis-accounting-36023

    Solution Preview

    1.Delphi Switch and Signal sold equipment to a Canadian
    transportation company at a price of 150,000 Canadian dollars with
    payment due in 60 days. On the date of sale the exchange rate was
    1.50 Canadian dollars per U.S. dollar. Delphi decided to hedge the
    risk of currency fluctuations by purchasing 150,000 Canadian
    dollars with payment due in 60 days. If the exchange rate in 60
    days is 1.25 Canadian dollars per U.S. dollar, Delphi Switch and
    Signal will:
    b. Recognize a $20,000 gain when it collects the receivable and
    incur a $20,000 loss when it pays the liability.
    He will collect 150,000/1.25=120,000 US$, thus gain of $20,000. He will loose the same amount on hedge.

    2.Precision Instruments sold equipment to a British ...

    Solution Summary

    The expert examines business analysis and accounting. The receivable transactions are examined.

    $2.49

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