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

question 55

Essay

Wallaby 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:
$\text { Machine-hours: }$
$\begin{array} { l r r r } \text { Variable } & \text { Coefficient } & \text { StandardError } & \text {-Value } \\ \text { Constant } & \$ 748.30 & \$ 341.20 & 2.19 \\\text { Independent Variable } & \$ 52.90 & \$ 35.20 & 1.50 \end{array}$
$r ^ { 2 } = 0.33$
$\text { Number of packages: }$
$\begin{array}{l}\begin{array}{lrrr}\text { Variable } & \text { Coefficient } & \text { StandardError } & \text {-Value } \\ \text { Constant } & \$ 242.90 & \$ 75.04 & 3.24 \\\text { Independent Variable } & \$ 5.60 & \$ 2.00 & 2.80\end{array}\\r^{2}=0.73\end{array}$
Required:
a.What are the estimating equations for each cost driver?
b.Which cost driver is best and why?
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