Consider the Following Set of Quarterly Sales Data,given in Thousands

question 75

Essay

Consider the following set of quarterly sales data,given in thousands of dollars. The following dummy variable model that incorporates a linear trend and constant seasonal variation was used: y(t)= B₀ + B_1t + B_Q1(Q1)+ B_Q2(Q2)+ B_Q3(Q3)+ E_t.In this model,there are 3 binary seasonal variables (Q1,Q2,and Q3),where Qi is a binary (0,1)variable defined as:
Qi = 1,if the time series data is associated with quarter i;
Qi = 0,if the time series data is not associated with quarter i.The results associated with this data and model are given in the following Minitab computer output.The regression equation is
Sales = 2442 + 6.2 Time − 693 Q1 − 1499 Q2 + 153 Q3 Provide a managerial interpretation of the regression coefficient for the variable "time."

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Definitions:

Dividends Account

An account used to record the payment of dividends, which are distributions of a corporation's earnings to its shareholders.

Expense

Costs incurred in the process of earning revenue, typically including cost of goods sold, selling, general, and administrative expenses.

Cash Account

An account that records all transactions involving cash receipts and cash payments, including operating, investing, and financing activities.

T Account

A graphical representation used in double-entry bookkeeping to show the increases and decreases in an account, characterized by a T shape.