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I tried to solve this question and I am stuck in the contribution where back in dollar flows ( home currency)
I have few doubts in the contribution calculation ..why we revenues again and why is the need of all the calculation ..
Can’t we take simply part costs from yilandwe Rand flows and convert back to dollars ?
Imoni is buying the components for $160 per unit (200 – 40) and then selling them to Yilandwe at $280 per unit.
So the cost to Yilandwe is $280 (which needs converting to YR).
The income to Imoni is $280, but they also have the cost of $160, so net income to Imoni is $120.
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