Answer the Following Questions Using the Information Below:
Capity Tea

question 58

Multiple Choice

Answer the following questions using the information below:
Capity Tea Products has an exclusive contract with British Distributors. Calamine and Capity are two brands of teas that are imported and sold to retail outlets. The following information is provided for the month of March:
$\begin{array}{lrrrr} &\text { Actual }&&\text { Budget }\\& \text { Calamine } & \text { Capity } & \text { Calamine } & \text { Capity } \\\text { Sales in pounds } & 3,740 \mathrm{lbs} . & 3,960 \mathrm{lbs} . & 4,400 \mathrm{lbs} . & 3,300 \mathrm{lbs} \\\text { Price per pound } & \$ 2.80 & \$ 2.80 & \$ 2.00 & \$ 3.00 \\\text { Variable cost per pound } & 1.00 & 2.00 & 1.00 & 1.50 \\\text { Contribution margin } & \$ 1.80 & \$ 0.80 & \$ 1.00 & \$ 1.50\end{array}$ Budgeted and actual fixed corporate-sustaining costs are $1,850 and $2,300, respectively.
-For the contribution margin,what is the total flexible-budget variance?

• A) $330 favorable
• B) $220 favorable
• C) $550 favorable
• D) $1,000 unfavorable

Understand the reasons behind bond ratings and their impact on investor perceptions and bond pricing.

Analyze the term structure of interest rates and its components.

Appreciate the effect of inflation on bond returns and the Fisher effect.

Interpret bond indentures, including protective covenants and their implications for both issuers and holders.

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