管理会计(英文版)课后习题答案(高等教育出版社)chapter 14

管理会计（高等教育出版社）

于增彪（清华大学）改编

余绪缨（厦门大学）审校

CHAPTER 14 INTERNATIONAL ISSUES IN MANAGEMENT ACCOUNTING QUESTIONS FOR WRITING AND DISCUSSION

1.Differences among countries in terms of the

political, legal, and cultural environment can all affect the firm. The management accoun-tant may find that practices that work well in the home country do not work as well (or at all) in other countries. It is necessary for the management accountant to be aware of all facets of business and to be knowledgeable and creative in applying accounting concepts in various business environments.

2. A foreign trade zone is an area that is physi-

cally on U.S. soil but is considered to be out-side U.S. commerce. As a result, goods im-ported into a foreign trade zone are free of tariff or duty until they leave the zone. There-fore, companies located in a foreign trade zone can postpone payment of tariff and the associated loss of working capital. Additional-ly, the company does not pay duty on defec-tive materials or inventory that has not been included in the finished product.

3.Outsourcing is the payment by a company for

a business function that was formerly done

in-house. In an international context, out-sourcing refers to the location of business functions in another country. Frequently, the work outsourced is to a lower-wage country.

The company receives a comparable quality of work but at a lower cost. 4.Joint ventures are partnerships between two

or more companies. The enterprise is co-owned. A company may find joint ventures advantageous when another company has expertise that the first company lacks. In ad-dition, restrictions by certain countries on for-eign ownership of business may mean that a joint venture is the only avenue open to a company wishing to expand into the foreign country.

5.Maquiladoras are manufacturing plants lo-

cated in Mexico that process imported mate-rials and reexport them to the United States.

Maquiladoras are exempt from Mexican laws governing ownership, and the U.S. govern-

ment grants exemptions from or reductions in custom duties levied on reexported goods.

Many U.S. firms have embraced the maquila-dora because of the low-cost labor, the flexi-ble ownership structure, and the opportunity to locate close to an increasingly important Mexican market.

6.The exchange rate is the amount for which

one currency can be traded for another. The spot rate is the exchange rate in effect at the current time. There are also future exchange rates, which describe the rates in effect for fu-ture delivery.

7.These three types of risk relate to the impact

on the firm of changing exchange rates.

Transaction risk refers to the possibility that future cash transactions will be affected by changing exchange rates. Economic risk re-fers to the possibility that a firm’s present value of future cash flows can be affected by exchange fluctuations. Translation risk is the degree to which a firm’s financial statements are exposed to exchange rate fluctuations. 8.Currency appreciation means that the home

country’s currency strengthens against another currency. In other words, one unit of the home currency purchases more units of another currency than it did previously. Cur-rency appreciation makes the products of a foreign country cheaper than before, and thus, it is easier for a company in the home country to import goods.

9.Currency appreciation makes the home coun-

try currency more expensive to foreign cus-tomers, thereby making the products of the home country firm more expensive than they were before. For example, if the exchange rate is one home country unit to one foreign country unit and the currency appreciates, then the exchange rate might become one home country unit to two foreign units. That is, the home country unit buys more foreign currency as it appreciates. Put differently, the foreign currency buys less as the home coun-try currency appreciates. 10.If Mexico devalues the peso, a dollar will buy

relatively more pesos, making the cost of

Mexican labor cheaper. As the controller, you

will revise your estimates of labor costs in the

maquiladora downward. The proposed new

production facility will be more attractive.

As a local labor union leader, you would be

displeased by the potential devaluation. If

Mexican wages go down relative to U.S.

wages, Mexican labor will be relatively more

attractive, and more jobs may be outsourced

to Mexico.

11.Hedging is a way of insuring against gains

and losses on foreign currency exchange.

The company that imports the material may

be afraid that the exchange rate will change

in 90 days and that the home currency will

weaken against the foreign currency. In that

case, the company may hedge by purchasing

a forward contract for the foreign currency,

thereby locking in the exchange rate and in-

suring against adverse exchange rate fluctua-

tions.

12.Disagree. The manager of a subsidiary should

not be evaluated on the basis of factors over

which he or she has no control. These factors

may include transfer prices, currency fluctua-

tions, local taxes, and so on. The subsidiary

manager should be evaluated on the basis of

revenues and costs.

13.Environmental factors that may affect the

performance of divisional managers include

economic, legal, political, social, and educa-

tional variables.

14.Internal Revenue Code Section 482 outlines

the transfer pricing methods acceptable for

income tax purposes. The four acceptable

methods are the comparable uncontrolled

price method, the resale price method, the

cost-plus method, and any method jointly ac-

ceptable to the IRS and the company.