A Company Has Actual Unit Demand for Three Consecutive Years

question 5

Multiple Choice

A company has actual unit demand for three consecutive years of 124,126 and 135.The respective forecasts for the same three years are 120,120 and 130.Which of the following is the resulting MAD value that can be computed from this data?

• A)1
• B)3
• C)5
• D)15
• E)123

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Definitions:

Direct Labor Cost

The expense related to the wages of workers directly involved in the production of goods or services.

Activity-Based Costing

A costing method that assigns costs to products or services based on the activities and resources that go into producing them, aiming for more accurate cost allocation.

Product Margin

The amount by which a product's selling price exceeds its cost of production, contributing towards covering fixed costs and profit.

Direct Materials Cost

The cost of raw materials that are directly involved in the production of a product, easily traced back to the product itself.