B. FC Company Exhibit 1 below shows the budgeted and actual condensed income statements for FC Company at the start and end of 20X8 budget year. The profit plan for the year (expressed in parent company GAAP) is translated to parent currency at the beginning of period exchange rate of FC 1 PC 1. The foreign currency devalues by 20 percent by year-end. The company employs the FIFO costing method. Unit production costs dropped from a planned FC3.60 to FC3.00 per unit. Actual sales increased by 300 units from 1000 to 1300 units during the year at a price of FC5.00, FC1.00 lower than that expected. A performance report submitted to the parent company PC Company, breaking out price-, volume- and exchange-rate-induced variances appears in Exhibit 2