The Trend Equation for Annual Sales Data (In Millions of Dollars)

question 18

Multiple Choice

The trend equation for annual sales data (in millions of dollars) is $\ddot{\mathbf{p}}_{t}= 65 + 2.5 t$ , where t = 1 for 2000. The monthly seasonal index for December is 0.97. The forecast sales for December of 2009 is:

• A)90.0.
• B)7.28.
• C)7.50.
• D)7.69.

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Definitions:

Overhead Applied

The portion of overhead costs assigned to the production of goods or services.

Raw Materials Issued

The allocation or distribution of raw materials for use in the production process.

Labor Time Tickets

Paper or electronic forms used to track the amount of time a worker spends on a particular job or project, utilized for cost accounting and payroll purposes.

Factory Overhead

The total of all indirect costs associated with manufacturing, including utilities, rent for the manufacturing facilities, and maintenance.