In 2017, Commodity Inc

question 152

Multiple Choice

In 2017, Commodity Inc., processor of whole grain flour, had the capacity to produce 10,000,000 pounds of product at a conversion cost per pound of $0.20. The conversion cost per pound was $0.15 in 2016 (the previous year) . The direct material cost per pound for both years was $0.07 per pound and in 2017, Commodity Inc. produced 9,300,000 pounds while actual production for the previous year was 8,600,000 pounds. What was the cost of unused capacity in 2017?

• A) $280,000
• B) $140,000
• C) $105,000
• D) $210,000

Analyze a company's efficiency using return on total assets (ROTA) and return on equity (ROE).

Comprehend the concepts of book value per share and how it reflects a company’s financial status.

Calculate liquidity ratios including the current ratio, acid-test (quick) ratio, and working capital to assess a company's short-term financial health.

Evaluate a company’s operational efficiency through inventory turnover, accounts receivable turnover, average collection period, and average sale period.

---

Definitions:

Life Cycle Assessment

A technique for assessing the environmental impacts associated with all the stages of a product's life from raw material extraction through materials processing, manufacture, distribution, use, repair, maintenance, and disposal or recycling.

Apparel Industry

The sector of the economy that is involved in the design, production, and distribution of clothing and accessories.

Cotton

A natural fiber harvested from the cotton plant, used primarily in the textile industry for making fabrics.

Water Usage

The act of using water for various purposes, including domestic, agricultural, industrial, and recreational activities, which can have significant environmental and economic implications.