Answered: b. If the expected sales for chocolates…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Forrest and Dan make boxes of chocolates for which the demand is uncertain. Forrest says, "That's life." On the other hand, Dan believes that some demand patterns exist that could be useful for planning the purchase of sugar, chocolate, and shrimp. Forrest insists on placing a surprise chocolate-covered shrimp in some boxes so that "You never know what you'll get." Quarterly demand (in boxes of chocolates) for the last three years is shown in the table below:

Quarter	Year 1	Year 2	Year 3
1	3,000	3,275	3,425
2	1,000	1,300	1,450
3	700	750	1,050
4	4,500	4,650	4,850
Total	9,200	9,975	10,775

a. Use intuition and judgment to estimate quarterly demand for the fourth year.

The forecast for quarter 1 is

3,475

boxes of chocolates. The forecast for quarter 2 is

1,750

boxes of chocolates. The forecast for quarter 3 is

1,200

boxes of chocolates. The forecast for quarter 4 is

5,125

boxes of chocolates.

b. If the expected sales for chocolates are

11,275

cases for year 4, use the multiplicative seasonal method to prepare a forecast for each quarter of the year. (Round all intermediate calculations to two decimal places.

The first quarter forecast is =? boxes of chocolates. (Enter your response rounded to the nearest whole number.)

2nd quater=?

3rd=?

4th=?

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