Calculating Seasonal Index for Q1

ABC Corp has historically analyzed its quarterly sales data to identify seasonal patterns. The past five years of quarterly sales data exhibit a consistent pattern, where sales peak in Q4 due to holiday demand and drop in Q1 as the new year begins. ABC Corp is considering using a Seasonal Decomposition of Time Series (STL) to formally analyze these fluctuations.

As part of its analysis, the financial analyst at ABC Corp decides to estimate the seasonal indices for each quarter using the following average sales numbers for each quarter over the last five years:

• Q1: $200,000
• Q2: $300,000
• Q3: $400,000
• Q4: $800,000

Using the additive model, the analyst calculates the overall average quarterly sales and then determines the seasonal index for Q1. What is the correct formula for computing the seasonal index for Q1 based on the average sales for that quarter?