Answer: $1,212,000 or $1.212 million
Explanation:
To calculate the dollars’ worth of the index the manager should sell in the futures market to minimize the volatility of her position, we can use the following formula,
Dollar worth of index to sell = Value of the Portfolio * Portfolio Beta
Dollar worth of index to sell = 1,200,000 * 1.01
Dollar worth of index to sell = $1,212,000
The manager should sell $1,212,000 worth of the index in the futures market to minimize the volatility of her position.
Fleming corp. provided services on account. The transaction would be recorded with a credit to service revenue. The transaction will also be recorded on the accounts receivable ledger as well. Service revenue is an account used in accrual accounting that reports fee income that a company earns during a specific time frame. Accounts receivable is an account that shoes money that is owed to a company by its debtors.
Answer:
Option (C) is correct.
Explanation:
Variable costs = $28
Allocated fixed costs = $17
Selling price = $84
Due to acceptance of M offer, S would be got excess contribution margin per unit. Because acceptance selling price ($34) is greater than the variable cost per unit ($28).
We don't have any information about the fixed cost due to acceptance. Therefore, we assumed that fixed cost is not increased.
Increased contribution margin per unit:
= Selling price - Variable cost
= $34 - $28
= $6
For 3,000 units, Increased contribution margin = 3,000 × $6
= $18,000
Therefore, net income is increased by $18,000 when the offer is accepted.
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