ABC/ABM PROJECT Recall that in chapter 5 (Cost Estimation), we discussed the importance of choosing the right or best cost-effective cost driver using Regression analysis. We noted four important criteria that must be considered in the choice of cost drivers. These are Economic Plausibility, Coefficient of Determination or Goodness of Fit (R2), Significance of the Independent Variable, and Specification Analysis of Estimation Assumptions. Requirement #10 involves choosing between two cost drivers (COST DRIVER #1 & COST DRIVER #2) for the activity cost pool, ONLINE BANKING SUPPORT SERVICES (OBSS). For the sake of simplicity, we make the following assumptions: Positive relationships between both cost drivers and OBSS are economically plausible. The specification analysis of estimation assumptions for both cost drivers is valid. For example, the plot of the data indicates that assumptions of linearity hold. To consider and compare the two cost drivers, the Virgin Island Bank conducted a simple regression analysis using Excel that yielded the following results for the cost drivers: Criterion Cost Function: COST DRIVER #1 Y = 25,000 + 1,000X1 Cost Function: COST DRIVER #2 Y = 29,000 + 900X2 Goodness of Fit R2 = 0.72 R2= 0.22 Significance of the Independent Variable t-value = 5.08 t-value = 1.08 To make the choice between COST DRIVER #1 & COST DRIVER #2 for the activity cost pool, OBSS in the bank, please answer the following questions: Which of the two cost drivers is better for the OBSS activity cost pool? Explain your choice in detail based on the information provided in the table as follows: What does Goodness of Fit information indicate for the choice between the cost drivers? What does the Significance of the Independent Variable imply for the choice between the cost drivers? What is the implication of choosing the wrong cost driver? What is the predicted OBSS costs in the bank if X1 is 100