Exhibit 11.4 The Following Questions Use the Data Below

question 21

Multiple Choice

Exhibit 11.4
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using the additive seasonal method. The store has collected 12 quarters of data and needs your help to analyze the data.
-Refer to Exhibit 11.4. What formula should be entered in cell F7 to compute the seasonal factor using the additive seasonal effects model?

• A) =$J$3*D4+(1-$J$3)*(E3+F3)
• B) =$J$4*(D7-E7)+(1-$J$4)*F3
• C) =$J$4*(E7-E6)+(1-$J$4)*E6
• D) =$J$3*G3+(1-$J$3)*(D3+G3)

---

Definitions:

Factory Overhead

All indirect costs incurred during the manufacturing process, excluding the costs of direct labor and materials.

Factory Overhead

The indirect costs associated with manufacturing, including indirect labor, indirect materials, and other expenses that cannot be directly tied to the production of goods.

Indirect Material

Items used in the production process that do not become a part of the final product, such as lubricants for machines.

Direct Materials

Raw materials that are directly traceable to the production of a specific product and are a significant component of manufacturing expenses.