What Is the Mean Squared Error of the Following Forecasts

question 65

Multiple Choice

What is the mean squared error of the following forecasts? Month Actual Sales Forecast
Jan) 68 60
Feb) 48 50
Mar) 50 60
Apr) 30 30

• A) 168
• B) 5
• C) 20
• D) 1
• E) 42

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Definitions:

First Processing Department

is the initial stage or department in a manufacturing process where the raw materials start their transformation into finished goods.

Step-Down Method

A cost allocation method used in managerial accounting that allocates service department costs to other parts of an organization, including production departments.

Service Department Costs

Expenses incurred by support departments within a company, such as maintenance and administration, which do not directly produce goods or services but are necessary for operations.

Direct Method

A way of allocating service department costs directly to producing departments without any intermediate allocations, typically used in cost accounting.