The Process of Marking a Futures Contract to Market Means

question 41

Multiple Choice

The process of marking a futures contract to market means that:

• A) the profitability of the contract is locked in from the onset of the contract.
• B) the amount of commodity to be delivered changes as prices change.
• C) contracts are closed out as soon as they become unprofitable.
• D)profits or losses are posted to the contract daily.

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Definitions:

Rate Variance

The difference between the actual rate paid for goods or services and the expected (or standard) rate, most often related to labor or materials.

Direct Labor-Hours

Sum of working hours of staff directly participating in the production process of an item.

Labor Rate Variance

This is the difference between the actual cost of labor and the budgeted or standard cost of labor used in manufacturing.

Direct Labor-Hours

The total hours worked by employees directly involved in the production process, used for allocating labor costs to products.