TABLE 16-13 A Local Store Developed a Multiplicative Time-Series Model to Forecast

question 85

Short Answer

TABLE 16-13
A local store developed a multiplicative time-series model to forecast its revenues in future quarters, using quarterly data on its revenues during the 4-year period from 2005 to 2009. The following is the resulting regression equation:


-Referring to Table 16-13, using the regression equation, what is the forecast for the revenues in the first quarter of 2012?

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Definitions:

Direct Materials

Basic substances that can be directly linked to the production of a particular item.

Standard Costing

Standard Costing is an accounting method that utilizes standard costs for materials, labor, and overhead for the purpose of controlling costs and identifying variances.

Variable Overhead

Costs that fluctuate in total with changes in activity level, such as the cost of utilities or indirect materials, associated with production or services.

Labour Rate Variance

A financial metric that measures the difference between the actual cost of labor and its expected cost based on standard rates.