Exhibit 11.12 The Following Questions Use the Data Below

question 40

Multiple Choice

Exhibit 11.12
The following questions use the data below.
Joe's Sporting Goods wants to forecast quarterly sales figures using a seasonal regression model. The store has collected 12 quarters of data and needs your help to analyze the data. The relevant regression output is provided in the following table.
-Refer to Exhibit 11.12. What are predicted sales for the first quarter of year 4?

• A) 1155 ≤ predicted sales < 1160
• B) 1065 ≤ predicted sales < 1070
• C) 1410 ≤ predicted sales < 1415
• D) 1635 ≤ predicted sales < 1640

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Definitions:

Variable Overhead Standards

The budgeted or standard costs associated with variable overheads, which are expected to change in proportion to different levels of production activity.

Direct Labor-hours

Represents the total hours of labor directly involved in manufacturing a product or delivering a service.

Variable Overhead Rate

The rate at which variable overhead costs are allocated to each unit of production, typically based on hours of labor or machine hours.

Quantity Standard

A predetermined measure of the amount of input that should be used in the production of a single unit of product or service.