Suppose that the unadjusted seasonal factor for the month of April is 1.10.The sum of the 12 months' unadjusted seasonal factor values is 12.18.The normalized (adjusted)seasonal factor value for April:
A)Is larger than 1.1.
B)Is smaller than 1.1.
C)Is equal to 1.1.
D)Cannot be determined with the information provideD.

Question

Quizplus · Accepted Answer

The normalized seasonal factors are obtained by dividing each unadjusted seasonal factor by their average. Since the sum of all unadjusted seasonal factors is 12.18, their average value is 12.18/12 = 1.015. Therefore, the normalized seasonal factor for April would be 1.10/1.015 = 1.084, which is smaller than 1.10. Thus, the correct answer is B.

Suppose That the Unadjusted Seasonal Factor for the Month of April