From a strictly conceptual perspective, why would any manufacturer consider hedging their variable costs? Answer as if you own the company
What will be an ideal response?
I manufacture a product. Profits come from selling at the market-determined price, which is above my production costs. Without hedging, my profit is influenced by commodity price fluctuations, which are outside the expertise of running my business. Thus, I hedge that risk.
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The generally accepted accounting principles for trading securities include all of the following except
A) initially recording the investment at cost. B) subsequently valuing the investment at fair value. C) including unrealized holding gains and losses as a component of shareholders' equity. D) including interest and dividend revenue as part of income.
Which of the following is not an element of the control environment?
a. management philosophy and operating style b. organizational structure of the firm c. well-designed documents and records d. the participation of the board of directors and the audit committee
On a statement of cash flows prepared using the direct method, the amount representing cash paid for interest would
A) be shown in the net cash flows from financing activities section. B) not be shown. C) be shown in the net cash flows from investing activities section. D) be shown in the net cash flows from operating activities section.
Unlike manufacturing companies, service companies use an allocation base for allocating both direct and indirect costs
Indicate whether the statement is true or false