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Aquatic Corp

question 60

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Aquatic Corp.'s standard material requirement to produce one Model 2000 is 15 pounds of material at $110 per pound. Last month, Aquatic purchased 170,000 pounds of material at a total cost of $17,850,000. It used 162,000 pounds to produce 10,000 units of Model 2000.?Calculate the materials price variance and materials quantity variance, and indicate whether each variance is favorable or unfavorable.

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Definitions:

Financial Risk Management

The practice of protecting economic value in a firm by using financial instruments to manage exposure to risk.

Hedging

Hedging is an investment strategy used to minimize the risk of adverse price movements in an asset, typically by taking an offsetting position in a related security.

Risk Profile

An evaluation of an individual or organization's willingness and ability to take risks, often influencing investment choices.

Troy Ounces

A troy ounce is a unit of imperial measure, commonly used to gauge the weight of precious metals such as gold and silver, where one troy ounce is equivalent to approximately 31.1 grams.

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