All of the Following Are Characteristics of the Cash Market

question 41

Multiple Choice

All of the following are characteristics of the cash market except:

• A)that the spot price represents the actual dollar value for the immediate transfer of a commodity.
• B)that there must be a transfer of the actual physical possession of the goods.
• C)that prices in the cash market are independent of prices in the futures market.
• D)All of the above are characteristics of the cash market

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Definitions:

Manufacturing Overhead

All manufacturing costs that are not directly related to the production of goods, such as the cost of maintenance, heat, and light of the production facility.

Plantwide Predetermined Rate

A single overhead rate calculated by dividing total estimated manufacturing overhead costs by the total estimated amount of the allocation base, applied throughout an entire plant or facility.

Machine-Hours

The total number of hours that machinery is in operation, used as a basis for allocating manufacturing overhead costs in a production environment.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to individual units of production, based on a chosen activity base.