Question

Using the five-week moving average, as the Week 6 forecast and an actual Week 6 cash flow of $120,000, determine the forecasted cash flow for Week 7 using the exponential smoothing approach with a smoothing constant (a or alpha) equal to 0.40. Week 1 $100,000 Week 2 $125,000 Week 3 $145,000 Week 4 $130,000 Week 5 $110,000

          Using the five-week moving average, as the Week 6
forecast and an actual Week 6 cash flow of
$120,000, determine the forecasted cash flow for
Week 7 using the exponential smoothing approach
with a smoothing constant (a or alpha) equal to 0.40.
Week 1 $100,000
Week 2 $125,000
Week 3 $145,000
Week 4 $130,000
Week 5 $110,000

Using the five-week moving average, as the Week 6
forecast and an actual Week 6 cash flow of
120,000, determine the forecasted cash flow for
Week 7 using the exponential smoothing approach
with a smoothing constant (a or alpha) equal to 0.40.
Week 1100,000
Week 2 125,000
Week 3145,000
Week 4 130,000
Week 5110,000

Added by Tom-S L.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Ramesh Rajak

Step 1

The five-week moving average is calculated by summing the cash flows for the past five weeks and dividing by 5. Week 1: $100,000 Week 2: $125,000 Week 3: $145,000 Week 4: $130,000 Week 5: $110,000 Moving average = (100,000 + 125,000 + 145,000 + 130,000 + 110,000) Show more…

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Using the five-week moving average, as the Week 6 forecast and an actual Week 6 cash flow of $120,000, determine the forecasted cash flow for Week 7 using the exponential smoothing approach with a smoothing constant (a or alpha) equal to 0.40. Week 1: $100,000 Week 2: $125,000 Week 3: $145,000 Week 4: $130,000 Week 5: $110,000