IT Corp. wants to estimate Design Costs more accurately. A regression analysis was completed on two variables: the number of new products introduced and the number of design hours. The regression results are as follows:

# of New Products Coefficient Standard Error t-Value Constant $ 1,393.90 $ 305.68 4.56 Independent variable $ 14.21 $ 6.15 2.31 Budgeted # of New Products 10 r2 = 0.42

# of Design Hours Coefficient Standard Error t-Value Constant $ 1,736.34 $ 530.99 3.27 Independent variable $ 159.30 $ 27.00 5.90 Budgeted # of Design Hours 600 r2 = 0.82

Using the regression analysis above, fill-in the blanks below.

Based on the regression analysis above, the better cost driver to estimate Design Costs is

_____________________________. This cost driver is better because the __________________

statistic Is ___________________________. Also, the _________________________ statistic is

________________________________.

Using this cost driver, the cost estimation equation is:

______________________________________________________

Using the regression data above, Estimated Design Costs for the upcoming budget period are:

_____________________________________________________