Lexon Inc. is a large manufacturer of affordable DVD players. Management recently became aware of rising expenses resulting from returns of malfunctioning products. As a starting point for further analysis, Paige Jennings, the controller, wants to test different forecasting methods and then use the best one to forecast quarterly expenses for 2022. The relevant quarterly data for the previous three years follow:

The result of a simple regression analysis using all 12 data points yielded an intercept of $11,868.18 and a coefficient for the independent variable of $124.13. (R-squared = 0.19, SE = $978.74.)

Required

1. Plot the data in the order of the dates.

2. Looking at the graph you prepared for requirement 1, select two representative data points and calculate the quarterly forecast for 2022 using the high-low method.

3. Calculate the quarterly forecasts for 2022 using the results of a regression analysis. Evaluate the results of the regression analysis and make appropriate changes to improve the model.

4. Use the Forecast Sheet tool in Excel to create the the quarterly forecast for 2022 and compare the results to those obtained from the regression results in requirement 3.

5. How does your analysis of costs change if Lexon manufactures its products in multiple global production facilities to serve the global market?

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2019 Return 2020 Return 2021 Return Quarter Expenses Quarter Expenses Quarter Expenses $12,500 $12,900 $13,300 11,600 12,100 12,300 11,300 3. 11,700 12,100 13,700 14,000 14,600 1234 -234