Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 14

S.company's foreign subsidiary had these amounts in foreign currency units (FCU) in 2011:
Cost of goods sold...............FCU 10,000,000
Ending inventory................500,000
Beginning inventory..............200,000
The average exchange rate during 2011 was $0.80 = FCU 1.The beginning inventory was acquired when the exchange rate was $1.00 = FCU 1.Ending inventory was acquired when the exchange rate was $0.75 = FCU 1.The exchange rate at December 31, 2011, was $0.70 = FCU 1.Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary's cost of goods sold be reflected in the U.S.dollar income statement
a.$7,815,000.
b.$8,040,000.
c.$8,065,000.
d.$8,090,000.