You Are Given That the Forecast for the Current Period

question 17

Multiple Choice

You are given that the forecast for the current period of 70 turned out to be 6 units less than the actual demand.The forecast for the next period is 75.8.What must alpha equal (rounded to 4 decimals) if a simple exponential smoothing forecast method were being used?

• A)0.0042
• B)0.9667
• C)0.0400
• D)0.0967
• E)None of the above

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Definitions:

Overapplied

A situation in cost accounting where the allocated overhead costs exceed the actual overhead costs.

Finished Goods Inventory

The stock of completed products that are ready to be sold.

Underapplied

Describes the situation where the allocated manufacturing overhead is less than the actual manufacturing overhead incurred.

Overapplied

A situation in which the allocated manufacturing overhead cost is more than the actual overhead cost incurred.