You work for a company in the marketing department. Your manager has tasked you with forecasting sales by month for the next year. You notice that over the past 12 months sales have consistently gone up in a linear fashion, so you decide to run a regression the company's sales history. You find that the regression equation for the data is (sales) = 74.197*(time) + 149.235. In August (time = 8) you see the actual sales quantity was 388.329. The residual is -354.482. Interpret this residual in terms of the problem.

Question 10 options:

1)The sales is 388.329 units less than what we would expect.

2)The month is 354.482 months larger than what we would expect.

3)The sales is 354.482 units greater than what we would expect.

4)The sales is 354.482 units less than what we would expect.

5)The month is 354.482 months less than what we would expect.