H is forecasting its sales for next year using a combination of time series and regression analysis models. An analysis of past sales units has produced the following equation for the quarterly sales trend:

y = 26x + 8,850

where the value of x represents the quarterly accounting period and the value of y represents the quarterly sales trend in units. Quarter 1 of next year will have a value for x of 25, quarter 2 - 26 and so on.

The quarterly seasonal variations have been measured using the multiplicative (proportional) model and are:

Quarter 1 15%

Quarter 2 5%

Quarter 3 + 5%

Quarter 4 + 15%

Production is planned to occur at a constant rate throughout the year. The company does not hold inventories at the end of any year.

What is the difference between the budgeted sales for quarter 1 and quarter 4 next year?

a.

78 units

b.

2,850 units

c.

2,862 units

d.

2,940 units