Two Mercenary Forecasters Dueled for the Lucrative Surreal Farms Egg

question 39

Essay

Two mercenary forecasters dueled for the lucrative Surreal Farms egg production forecasting job. The farmer provided them with output levels from ten day's production and had them forecast the next ten days. The combatant's forecasts and the actual egg production are shown in the table. Which forecaster was more accurate and should be hired as a result of his performance on this trial?

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Definitions:

Fixed Manufacturing Overhead

The portion of manufacturing overhead costs that remains constant regardless of the level of production, such as depreciation of equipment and salary of supervisors.

Budget Variance

The difference between budgeted and actual figures for a given period, indicating under or overspending.

Machine-Hours

A measure of production time, calculating the total hours a machine is operated in the production of goods.

Actual Level

The real, observed state or amount of something, rather than estimated or predicted levels.