The Spot Price on Cocoa Is $3,100 a Ton

question 90

Multiple Choice

The spot price on cocoa is $3,100 a ton. The futures price is $3,180 a ton. The basis is ________ and the market is a(n) ________ market.

• A)−80; carrying-charge
• B)−80; inverted
• C)−60; inverted
• D)80; carrying-charge
• E)80; inverted

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Definitions:

Conversion Costs

The sum of direct labor and manufacturing overhead costs, representing the total expenses necessary to transform raw materials into finished goods.

Materials Purchased

This refers to the raw materials bought by a company for the production of goods.

Materials Requisitioned

The process of formally requesting materials or supplies, usually from a company's inventory, for production or other uses within the organization.

Production Department

A segment within a company responsible for the production of goods or services.