You Purchased the Following Futures Contract Today at the Settlement

question 52

Essay

You purchased the following futures contract today at the settlement price listed in the Wall Street Journal.Answer the questions below regarding the contract. - What is the total value of the futures contract?
- If there is a 10% margin requirement how much do you have to deposit?
- Suppose the price of the futures contract changes as shown in the following table.
- Enter the relevant information into the table.Show your calculations.
- Explain why the account is marked-to-market daily.

---

Definitions:

Process Costing System

An accounting methodology used in industries where production is continuous, assigning costs to units of product based on the process they go through.

Raw Materials Inventory

The stock of basic materials and components that are required in the manufacturing process before they are transformed into finished goods.

Purchase

The acquisition of goods or services in exchange for money, representing a transaction that increases inventory or assets for a business.

Process Costing System

An accounting method used to assign production costs to units of output, typically used in manufacturing environments where products are indistinguishable from one another.