Question

Checked		International Cost
Test 21
Consider the following costs of your high-end furniture business:
Pieces of leather per couch					380
Price per leather piece in Chilean Pesos					30
Hours of Mexican labor per couch					50
Wage per hour in Mexican Pesos					157
Couches sold in New York					216
Couches sold in London					171
Exchange rates
549.360725	Chilean Peso per dollar
14.015212	Mexican Pesos per dollar
What is the cost to the firm, in dollars?
A Between 100,000 and 180,000
B Between 180,000 and 207,000
C Between 207,000 and 230,000
D Between 230,000 and 250,000

Answer 1

Particulars		Amount
Piece of leather per Couch	A	380
Price per piece (Chilean Peso)	B	30
Amount of leather per Couch (Chilean Peso)	C=A*B	11,400
Hours of labour per Couch	D	50
Wages per hour (Mexican peso)	E	157
Total Wages per Couch (Mexican Peso)	F = D*E	7,850
Total Couches Sold (216+171)	G	387
Leather Consumed (Chilean Peso)	H=G*C	44,11,800
Wages Charged (Mexican Peso)	I=G*F	30,37,950
Exchange Rate
1$ = 549.360725 Chilean Peso
1$ = 14.015212 Mexican Peso
Leather Consumed (in $)	H/549.360725	8,031
Wages Charged (in $)	I/14.015212	2,16,761
Total amount (in $)	Sum of above two	2,24,792

Therefore correct Option in C!! as cost is $2,24,792.

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