Acompany wishes to hedge its exposure to a new fuel whose price changes have a 0.6 correlation with gasoline futures price changes. the company will lose $1 million for each 1 cent increase in the price per gallon of the new fuel over the next three months. the new fuel's price change has a standard deviation that is 50% greater than price changes in gasoline futures prices. if gasoline futures are used to hedge the exposure what should the hedge ratio be? what is the company's exposure measured in gallons of the new fuel? what position measured in gallons should the company take in gasoline futures? how many gasoline futures contracts should be traded? each contract is on 42,000 gallons.

When consumers discard their gasoline-powered automobiles for electric-powered ones, this partially reflects the of gasoline?

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Walsh company manufactures and sells one product. the following information pertains to each of the company’s first two years of operations: variable costs per unit: manufacturing: direct materials $ 25 direct labor $ 12 variable manufacturing overhead $ 5 variable selling and administrative $ 4 fixed costs per year: fixed manufacturing overhead $ 400,000 fixed selling and administrative expenses $ 60,000 during its first year of operations, walsh produced 50,000 units and sold 40,000 units. during its second year of operations, it produced 40,000 units and sold 50,000 units. the selling price of the company’s product is $83 per unit. required: 1. assume the company uses variable costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 2. assume the company uses absorption costing: a. compute the unit product cost for year 1 and year 2. b. prepare an income statement for year 1 and year 2. 3. reconcile the difference between variable costing and absorption costing net operating income in year 1.