the cost function is calculated using only two data points. Y = a + bXTotal costvariable cost per unitof activityLevel of activityfixed cost1) Find highest and lowest level of activityLowestHighest2) Use the following formula to estimate bDifference in cost levelsDifference in activity levelsb =393.987 -202.55171231250 -15044=0.011813=3) Use the above cost function for the highest or lowest level of activity to estimate aY = a + bXHighest level of activity393.987 = a + 0.011813 * 31250a= 24.831Y = 24.831+ 0.011813X23a statistical technique that can be used to estimate the relationship between a dependent variable (cost) and independent variables (cost drivers)Use Microsoft Excel2413https://www.youtube.com/watch?v=mloS7IRo36c2If you do not have "Data Analysis" option, watch this video clip to learn how to add it. 6/03/20211325Y is the costX is the cost driverTick "Labels" if the first row includes the label of variables.1234Y = 19.842+ 0.0116579XR = -1R = 0R = +1< 0.0526The regression result:Y = a + bXab 6/03/202114Regression using Excel charts