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expected value question help

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › expected value question help

  • This topic has 1 reply, 2 voices, and was last updated 14 years ago by John Moffat.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • April 22, 2011 at 5:28 pm #48192
    saleema
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    hi can someone please help me with this question

    A toy company is preparing its budgets for next year. The following regression equation has been found to be a reliable estimate of the toy companies deseasonalised sales in units:

    y = 10x+150

    Where y = total units and x refers to the accountancy period.

    What is the expected figure for actual sales in accounting period 19 (which is Q1)?

    A) 255
    🙂 315
    C) 340

    The answer in the book says that it is C (10×19 + 150 = 340).

    I do not understand why you multiply by ‘19’ because it says in the question 19 is Q1.

    Any ideas?

    🙂

    April 25, 2011 at 6:37 pm #81053
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54830
    • ☆☆☆☆☆

    But it says that it is accountancy period 19, and x in the regression equation is the accountancy period.

    The fact that it happens to be quarter 1 of a particular year has nothing to do with it (unless the question also tells you about seasonal variations).

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