Use the Following Quarterly Data (Sales in Units) to Develop

question 142

Essay

Use the following quarterly data (sales in units) to develop the seasonal indexes: $$\begin{array} { | l | l | l | l | } \hline \text { Quarter } & \text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\hline 1 & 51 & 62 & 74 \\2 & 103 & 124 & 133 \\3 & 172 & 199 & 222 \\4 & 296 & 332 & 367 \\\text { Total } & 622 & 717 & 796 \\\hline\end{array}$$ The manager predicts that the demand for next year will be 900. What are the quarterly forecasts for next year?

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Definitions:

Direct Labor

Direct labor relates to the work of employees who are directly involved in the production of goods or services.

Fixed Manufacturing Overhead

Indirect production costs that remain constant regardless of the level of production, such as rent, property taxes, and insurance.

Variances

The differences between planned or expected financial outcomes and the actual financial outcomes.

Fixed Overhead

The portion of overhead costs that remains constant regardless of the level of production or business activity.