A, B AND C PLEASE

3. All Kiwi Ltd. (a New Zealand-based company) has a wholly-owned subsidiary in Malaysia whose manager is being evaluated on the basis of the variance between actual profit and budgeted profit in New page 434 Zealand dollars (NZD). Relevant information in Malaysian ringgit (MYR) for the current year is as follows: Budget Actual MYR 12,000,000 MYR 11,000,000 Revenues Expenses. 9,000,000 9,000,000 Current year actual and projected exchange rates between the NZD and the MYR are as follows: Actual at NZD time of 0.312 budget preparation MYR 1 per Projected ending at time of budget preparation NZD 0.340 per MYR 1 NZD 0.357 Actual at end of budget period per MYR 1 Required: requireu: a. Calculate the total budget variance for the current year using each of the five combinations of exchange rates for translating budgeted and actual results shown in Exhibit 10.10. b. Make a recommendation to All Kiwi's corporate management as to which combination in item (a) should be used, assuming that the manager of the Malaysian subsidiary does not have the authority to hedge against changes in exchange rates. Make a recommendation to All Kiwi's corporate management as to which combination in item (a) should be used, assuming that the manager of the Malaysian subsidiary has the authority to hedge against unexpected changes in exchange rates. EXHIBIT 10.10 Combinations for Translation of Budget and Actual Results Source: D. R. Lessard and P. Lorange, "Currency Changes and Management Control: Resolving the Centralization/Decentralization Dilemma," Accounting Review, July 1977, pp. 62837. Rate Used to Track Actual Performance Relative to Budget Actual Actual Projected at TOB at TOB "TOB at EOP Rate Used for Determining Budget Actual at time of budget (TOB) Projected at time of budget n/a n/a Actual at end of period (EOP) n/a n/a