I the Ratio-To-Moving Average Method Removes the Time Series Trend

question 136

Multiple Choice

i. The ratio-to-moving average method removes the time series trend component, resulting in 12
Numbers that are called specific seasonals.
ii. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to
Remove the seasonal components from the time series using a 3-month centered moving average.
iii. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) and (ii) are correct statements but not (iii).
• C) (i) and (iii) are correct statements but not (ii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (ii) is a correct statement but (i) and (iii) are incorrect.

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Definitions:

Direct Labor-Hours

A measure of the total hours worked by employees directly involved in the production process.

Machine-Hours

A measure of production output or activity based on the number of hours that machines are operational.

Predetermined Overhead Rate

A rate used to apply manufacturing overhead to products or job orders, calculated based on estimated costs and activity levels.

Machine-Hours

A measure of the amount of time a machine is operated during a specific period, used in cost accounting to allocate expenses to products.