Page 49 - BA2 Integrated Workbook STUDENT 2018
P. 49

Analysing and predicting costs




               2.2   Equation of a straight line

               With the high-low method only two observations are used and a linear relationship is
               assumed. However these two extreme points may hide the true relationship between
               the variables.



                  y
                  ion










                   a
                 ion



                                                         x
                                                        ion

               Consider the equation of a straight line:

               y = a + bx

               where:         y = dependent variable

                              x = independent variable


                              a = intercept on y-axis

                              b = gradient of the line






















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