What Is the Mean Squared Error of the Following Forecasts

question 117

Multiple Choice

What is the mean squared error of the following forecasts? Month Actual Sales Forecast
Jan) 614 600
Feb) 480 480
Mar) 500 450
Apr) 500 600

• A) 3174
• B) 164
• C) 41
• D) 136
• E)12,696

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Definitions:

Variable Product Cost

Costs that change in direct proportion to the level of production, such as materials and direct labor.

Fixed Period Cost

A type of cost that does not change with the level of production or sales over a certain period of time.

Delivery Charges

Delivery Charges are fees imposed for the delivery of goods or services from the seller to the purchaser's location.

Total Manufacturing Costs

This encompasses all costs involved in the production of goods, combining direct materials, direct labor, and manufacturing overhead.