The Boxer Company Has Been in Business Since 1998

question 100

Multiple Choice

The Boxer Company has been in business since 1998.The following sales data are recorded by quarter for the years 1999-2001. The managers at the company wish to determine the seasonal indexes for each quarter during the year.The first step in the process is to remove the seasonal and random components.To do this,they will begin by computing a four-period moving average.They then compute the centered moving average.What is the next step in applying the multiplicative model?

• A)Compute the grand mean
• B)Divide the centered moving average by the forecasted value
• C)Compute the ratio to moving average value
• D)Normalize the data

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Definitions:

Equivalent Units

A concept used in process costing that converts partially completed units into a smaller number of fully completed units to simplify cost calculations.

FIFO Method

An accounting method where the first items added to inventory are the first ones to be sold or used.

Equivalent Units

A concept used in cost accounting to express the amount of work done by manufacturers in terms of fully completed units of output.

Direct Materials

Raw materials that are directly traceable to the manufacturing of a product and constitute a significant portion of the production costs.