Hassan Gurdezi, the director of cost operations of Micro Devices Company, wishes to develop the most accurate cost function to explain and predict support costs in the company's printed circuit board assembly operation. Mr. Gurdezi has read about activity-based costing and is concerned that the cost function that he currently uses-based on direct labour costs-is not accurate enough for proper plan- ning and control of support costs. Mr. Gurdezi directed one of his financial analysts to obtain a random sample of 25 weeks of support costs and three possible cost dri- vers in the circuit board assembly department: direct labour cost, number of boards assembled, and average cycle time of boards assembled. Average cycle time is the average time between the start and the certified completion after quality testing of boards assembled during a week. Much of the effort in this assembly operation is devoted to testing for quality and reworking defective boards, all of which increase the average cycle time in any period. Therefore, Mr. Gurdezi believes that average cycle time will be the best support cost driver. Mr. Gurdezi wants his analyst to use regression analysis to demonstrate which cost driver best explains support costs.

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CIRCUIT BOARD AVERAGE ASSEMBLY DIRECT SAMPLE NUMBER SUPPORT LABOUR NUMBER OF BOARDS CYCLE TIME COSTS HOURS ASSEMBLED (HOURS) 12345678 $66,402 7,619 2,983 186.44 56,943 7,678 2,830 139.14 60,337 7,816 2,413 151.13 50,096 7,659 2,221 138.39 64,241 7,646 2,701 158.63 60,846 7,765 2,656 148.71 43,119 7,685 2,495 105.85 63,412 7,962 2,128 174.02 9 59,283 7,793 2,127 155.30 10 60,070 7,732 2,127 162.20 11 53,345 7,771 2,338 142.97 12 65,027 7,842 2,685 176.08 13 58,220 7,940 2,602 150.19 14 65,406 7,750 2,029 194.06 15 35,268 7,954 2,136 100.51 16 46,394 7,768 2,046 137.47 17 71,877 7,764 2,786 197.44 18 61,903 7,635 2,822 164.69 19 50,009 7,849 2,178 141.95 20 49,327 7,869 2,244 123.37 22222 21 44,703 7,576 2,195 128.25 45,582 7,557 2,370 106.16 23 43,818 7,569 2,016 131.41 24 62,122 7,672 2,515 154.88 25 52,403 7,653 2,942 140.07