Exhibit 11.1 The Following Questions Use the Data Below

question 102

Multiple Choice

Exhibit 11.1
The following questions use the data below.
Honest Al's Used Cars wants to predict how many cars are sold each month. He has collected data for 12 months. He needs your help in analyzing this data using moving averages.
-Refer to Exhibit 11.1. What Excel function will compute the root mean squared error in cell C18 of the spreadsheet?

• A) =SUMXMY2(B7:B14,C7:C14)
• B) =SQRT(SUMXMY2(B3:B14,C3:C14)/COUNT(C3:C14))
• C) =SUMXMY2(B7:B14,C7:C14)/COUNT(C7:C14)
• D) =SQRT(SUMPRODUCT(B7:B14,C7:C14)/COUNT(C7:C14))

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Definitions:

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in the cost of a unit of product.

Inventory

Items held for sale in the ordinary course of business, as well as supplies and materials used in producing goods for sale.

Gross Profit

The profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services.

Absorption Costing

A pricing strategy that encompasses all expenses associated with production, including direct materials, direct labor, as well as both variable and fixed overhead costs, in the product's price.