Speculation Likely Does Not Have a Large Effect on Oil

question 5

Multiple Choice

Speculation likely does not have a large effect on oil prices because of:

• A) A misunderstanding of futures contracts
• B) High storage costs
• C) The discovery of fracking
• D) The invention of electric automobiles

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Definitions:

Machine-hours

A measure of production time, used in cost accounting, representing the hours that a machine operates.

Predetermined Overhead Rate

This refers to the rate used to allocate manufacturing overhead costs to individual products or job orders, calculated before the accounting period begins based on estimated costs and activity levels.

Machine-hour

A measure of the amount of time a machine is operated, used in calculating manufacturing costs and setting production schedules.

Predetermined Manufacturing Overhead

A calculation used to estimate the total manufacturing overhead costs for a certain period, often used for budgeting and cost management in production.