Schotte Manufacturing Company uses two different independent variables (machine-hours and number of packages)in two different equations to evaluate costs of the packaging department.The most recent results of the two regressions are as follows:
Machine-hours:
Number of packages:
There were twenty degrees of freedom.The critical value at the 95% level is 1.729.Required:
a.What are the estimating equations for each cost driver?
b.Which cost driver is best and why?

Question

Schotte Manufacturing Company uses two different independent variables (machine-hours and number of packages)in two different equations to evaluate costs of the packaging department.The most recent results of the two regressions are as follows:
Machine-hours:
   Number of packages:
   There were twenty degrees of freedom.The critical value at the 95% level is 1.729.Required:
a.What are the estimating equations for each cost driver?
b.Which cost driver is best and why?

Quizplus · Accepted Answer

The Answer of Schotte Manufacturing Company uses two different independent variables (machine-hours and number of packages)in two different equations to evaluate costs of the packaging department.The most recent results of the two regressions are as follows:
Machine-hours:
   Number of packages:
   There were twenty degrees of freedom.The critical value at the 95% level is 1.729.Required:
a.What are the estimating equations for each cost driver?
b.Which cost driver is best and why?

Schotte Manufacturing Company Uses Two Different Independent Variables (Machine-Hours and Number