A Forecaster Used the Regression Equation and Quarterly Sales

question 43

Multiple Choice

A forecaster used the regression equation and quarterly sales data for 1996I-2013IV t = 1,...,64) for an appliance manufacturer to obtain the results shown below.Q is quarterly sales,and and are dummy variables for quarters I,II,and III. Using the estimation results given above,the predicted level of sales in 2014III is _______ units.

• A)141.5
• B)156
• C)172
• D)173.5
• E)none of the above

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Definitions:

Break-even Sales

The amount of revenue required to cover total fixed and variable costs, resulting in neither profit nor loss.

Unit Selling Price

The price at which a single unit of a product is offered for sale to customers.

Unit Variable Costs

Expenses that vary directly with the production volume, consisting of costs like materials and labor that change with the level of production.

Break-even Sales

The amount of revenue needed to cover both the fixed and variable costs, resulting in neither profit nor loss.