Limewater Inc is a Croatian company with a foreign subsidiary in Norway. The subsidiary manager is evaluated on the basis of profit in euros $($EUR$).$ The foreign

sub was budgeted to generate a profit of $600,000$ Norwegian kroner $($NOK$)$ in the current year. Actual profit was NOK $520,000.$ Corporate management has

calculated an unfavorable total budget variance for the foreign subsidiary of EUR $16,040.$

Actual and projected exchange rates are as follows:

a$.$ Identify the combination of exchange rates $($see Exhibit $10\mathrm{.}10)$ used in translating the budgeted and actual amounts that results in the total budget variance of

EUR $16,040.$

b$.$ Determine the portion of the total budget variance calculated by Limewater's corporate management that is caused by a change in the exchange rate

between the EUR and the NOK. $($Calculate all $3$ possible correct responses to this requirement$).$