If You Buy a Futures Contract on the S&P 500

question 51

Multiple Choice

If you buy a futures contract on the S&P 500 Index at a price of 450 and the index rises to 500,you will ________.

• A) lose $12,500
• B) gain $12,500
• C) lose $50
• D) gain $50

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Definitions:

Job-order Costing

An accounting method where costs are assigned to each individual job, commonly used in custom or batch production environments.

Work in Process

Items in various stages of completion in the production process, not yet finalized as finished goods.

Finished Goods

Items that have finished being made and are available for purchase.

Manufacturing Overhead

All manufacturing costs other than direct materials and direct labor, including maintenance, utilities, and depreciation.