You Are Trying to Determine Whether Machine Hours or Direct

question 19

Essay

You are trying to determine whether machine hours or direct labour dollars would be the best cost driver for overhead costs.You run two regression analyses and obtain the following results:
Machine hours
$\begin{array}{ll}\text { Multiple R } & .39429 \\\text { R square } & .15547 \\\text { Adjusted R square } & .14964 \\\text { Standard error } & .44416\end{array}$
Direct labour dollars:
$\begin{array}{ll}\text { Multiple R } &.89429\\\text { R square } &.79547 \\\text { Adjusted R square } & .289647 \\\text { Standard }&.44416\end{array}$
Which variable would be the best selection for a cost driver and why?

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Definitions:

Reproductive Cells

Cells that are involved in sexual reproduction, including sperm and egg cells, carrying genetic information to offspring.

Human Immunodeficiency Virus

A virus that attacks the immune system and can lead to acquired immunodeficiency syndrome (AIDS), a condition in which progressive failure of the immune system allows life-threatening opportunistic infections and cancers to thrive.

Malignant Tumours

Cancerous growths that have the ability to invade nearby tissues and spread to other parts of the body.

Blood

A vital liquid in humans and animals that delivers necessary substances such as nutrients and oxygen to the cells and transports metabolic waste products away.