_____ Pavax has intercompany sales to its foreign subsidiary and uses the foreign currency unit of measure approach. Pavax should calculate the amount of any unrealized intercompany profit using the
A) Current exchange rate.
B) Average exchange rate.
C) Historical exchange rate.
D) Nominal exchange rate.
E) None of the above.

Question

Quizplus · Accepted Answer

The historical exchange rate should be used to calculate unrealized intercompany profit because it reflects the rate at the time the transaction occurred, ensuring accurate profit measurement.

_____ Pavax Has Intercompany Sales to Its Foreign Subsidiary and Uses