1. What is a multinational corporation (MNC)? How would exchange rates affect the MNC’s total revenue and profits? How can the MNC hedge or reduce foreign exchange risk and/or political risk?
2. Sasha Company allocates the estimated $181,500 of its accounting department costs to its production and sales departments since the accounting department supports the other two departments particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Information regarding costs and employees follows:
Department Employees
Accounting 4
Production 28
Sales 20
How much of the accounting department costs will be allocated to the production?