Question: Woodlands Company ( a U . S . - based company ) has a subsidiary in Mexico that exports all of its production to customers
Woodlands Company a USbased company has a subsidiary in Mexico that exports all of its production to customers in Asian markets and sources all of its inputs locally. Budgets in Mexican pesos MXN and US dollars USD using the beginning of period exchange rate of USD per MXN are as follows:
MXNUSDSalesCostsProfit
During the budget period, the MXN decreased in value by percent against world currencies, such that the endofperiod exchange rate was USD per MXN Assuming that Woodlands uses the endofperiod exchange rate to track actual performance, actual results in MXN and USD are as follows:
MXNUSDSalesCostsProfit
As a result, there is an unfavorable total budget variance of MXN and an unfavorable total budget variance of USD
Required:
Determine the amount of the USD unfavorable total budget variance caused by a change in the USDMXN exchange rate.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
