Compared with a Forward Contract, a Futures Contract ________

question 28

Multiple Choice

Compared with a forward contract, a futures contract ________.

• A)is more flexible
• B)is normally available through commercial banks
• C)does not guarantee a future exchange rate
• D)is only traded on an exchange

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Definitions:

Plantwide Overhead Rate

A unified rate employed across the entire manufacturing facility to allocate overhead expenses to products.

Machine Hours

A measure of the amount of time that machinery is operating and being used for production within a given period.

Direct Labor Hours

The number of labor hours spent by employees directly involved in the manufacturing process of a product.

Departmental Overhead Rate

A method for allocating overhead costs to specific departments based on relevant activity drivers, aiding in more accurate cost assessment.