Answer:
The question does not mention when does the farmer has to sell the cattles in the future. So assuming the cattles are to be sold in the next 3 months.
The farmer can short 3 contracts that have 3 months to maturity. Two contracts would be of the 40k cattles whereas one of 20k.
Explanation:
When the prices of the cattles falls in the future, the gain on the futures contract will offset the loss on the sale of the cattle. Whereas, when the prices of cattle rises in the future, the gain on the sale of the cattle will be offset by the loss on the futures contract.
So basically, using futures contracts to hedge has the advantage that it can at no cost reduce risk to almost zero.
Solution:
Instructions Journalize the April transactions:
Date Account Titles and Explanation
4/30 Work in Process—Cooking
Work in Process—Canning
Raw Materials Inventory
4/30 Work in Process—Cooking
Work in Process—Canning
Factory Labor
4/30 Work in Process—Cooking
Work in Process—Canning
Manufacturing Overhead
4/30 Work in Process—Canning
Work in Process—Cooking
Cooking and out the debits
Debit Credit
22,800
10,900 33,700
9,400
7,230 16,630
33,800
28,100 61,900
55,900
55,900
Commuting - Traveling to get to work
Telecommutting - A form of flexplace...
Flextime - Flexibility in when you work
Flexplace - Flexibility in where you work
Answer:
A home mortgage company creates a sales promotion with incentives for potential home buyers to take advantage of a particularly favourable interest rate.
Explanation:
Companies usually give numerous promotions to their valuable customers to increase the overall sales revenue. In the above scenario, if a home mortgage company creates a sales promotion which attracts customers to buy their product and take advantage of the favourable interest rate is an example of companies focusing on macroeconomic factors. Macroeconomic forces are important for any company to improve profits.
B. Decreases
if demand goes down, nobody is buying anything, so the need to produce/manufacture is down
