Interpreting results of regression analysis. In the example of Elegant Rugs in the chapter, the student-t showed that for direct machine-hours (DMH) as the predictor variable, the intercept a was not statistically different from a random value but the slope b was very proba- bly not random. For direct manufacturing labour-hours (DMLH) as the predictor variable, the intercept a was very probably not random but the slope b was not statistically different from a random value. REQUIRED 1. What other statistics would the management accountant review before recommending which of these two should be the cost-allocation base? 2. What other alternatives could Elegant Rugs pursue if the decision was to improve on explanatory power?

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