Schotte Manufacturing Company uses two different independent variables (machine-hours and number of ...

a.   Machine-hours   y = $748.30 + $52.90X
   Number of packages   y = $242.90 + $5.60X

b.   Machine-hours has a low r2 which implies that a small proportion of the variance is explained by machine-hours, thereby making it less attractive than number of packages as a cost predictor.

Also, for the independent variable, number of packages, the t-value of 2.80 indicates that a relationship exists between the independent and dependent variables. For machine-hours, the t-value (1.50) is below 2.00, indicating that the coefficient is not significantly different from zero and that there may not be a relationship between the independent and dependent variables.

The t-values of the constant terms (g) for both drivers is greater than 2.00, therefore, there is no distinguishing characteristic between the constants.

Given the above findings, it appears that number of packages is the best predictor of costs of the packing department.