Consider the Quarterly Production Data (In Thousands of Units) for the XYZ

question 101

Short Answer

Consider the quarterly production data (in thousands of units) for the XYZ manufacturing company below. The normalized (adjusted) seasonal factors are winter = .9982, spring = .9263, summer = 1.139, and fall = .9365. Calculate the deseasonalized production value for each observation in the time series.

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Definitions:

Break-even Sales

Break-even Sales represent the amount of revenue needed to cover all fixed and variable costs, at which point a business does not make a profit or incur a loss.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, determined by the proportion of fixed versus variable costs a company has.

Operating Income

Earnings from a company’s core business operations, excluding deductions for interest and taxes.

Variable Costs

Costs that fluctuate in direct proportion to changes in levels of production or sales volumes.