{"id":288,"date":"2018-04-16T23:26:06","date_gmt":"2018-04-16T23:26:06","guid":{"rendered":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/?post_type=chapter&#038;p=288"},"modified":"2024-04-29T16:48:00","modified_gmt":"2024-04-29T16:48:00","slug":"dependent-independent-variables-in-mixed-cost-analysis","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/chapter\/dependent-independent-variables-in-mixed-cost-analysis\/","title":{"raw":"Independent vs. Dependent Variable","rendered":"Independent vs. Dependent Variable"},"content":{"raw":"<div class=\"textbox learning-objectives\">\r\n<h3>Learning Outcomes<\/h3>\r\n<ul>\r\n \t<li>Define dependent variable and independent variable<\/li>\r\n<\/ul>\r\n<\/div>\r\nHere is an overview of mixed costs, and creating a scattergraph to test our theory of the behavior of the costs.\r\n\r\n<iframe src=\"\/\/plugin.3playmedia.com\/show?mf=7494710&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=rml9qRC4Vy4&amp;video_target=tpm-plugin-k64y3xbt-rml9qRC4Vy4\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe>\r\nYou are the maintenance supervisor at the local dog groomer. It is budget time, and you are working on your maintenance budget for the year. In an effort to work through your numbers, you notice that the maintenance cost has a fixed component to it. The hypothesis is that for each additional dog groomed, there is additional maintenance cost incurred. Let\u2019s look at a few months worth of activity:\r\n<table style=\"border-collapse: collapse; width: 100%;\" border=\"1\">\r\n<thead>\r\n<tr>\r\n<th style=\"width: 33.3333%;\">Month<\/th>\r\n<th style=\"width: 33.3333%;\">Number of Dogs Groomed<\/th>\r\n<th style=\"width: 33.3333%;\">Total Maintenance Cost<\/th>\r\n<\/tr>\r\n<\/thead>\r\n<tbody>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">July<\/td>\r\n<td style=\"width: 33.3333%;\">560<\/td>\r\n<td style=\"width: 33.3333%;\">790<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">August<\/td>\r\n<td style=\"width: 33.3333%;\">710<\/td>\r\n<td style=\"width: 33.3333%;\">850<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">September<\/td>\r\n<td style=\"width: 33.3333%;\">500<\/td>\r\n<td style=\"width: 33.3333%;\">740<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">October<\/td>\r\n<td style=\"width: 33.3333%;\">650<\/td>\r\n<td style=\"width: 33.3333%;\">820<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">November<\/td>\r\n<td style=\"width: 33.3333%;\">730<\/td>\r\n<td style=\"width: 33.3333%;\">910<\/td>\r\n<\/tr>\r\n<tr>\r\n<td style=\"width: 33.3333%;\">December<\/td>\r\n<td style=\"width: 33.3333%;\">800<\/td>\r\n<td style=\"width: 33.3333%;\">980<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\nGoing back to our mixed cost formula:\r\n\r\nY= total maintenance cost and will be plotted on the vertical axis of our graph. This cost is the dependent variable since the amount depends on the activity for the period.\r\n\r\nX= the activity or number of dogs groomed. This will be plotted on the horizontal axis and is the independent variable, because it is the factor that causes the variations in the cost.\r\n\r\n<img class=\"aligncenter wp-image-1421 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/17002315\/Screen-Shot-2018-07-16-at-5.22.51-PM.png\" alt=\"A graph showing total maintenance cost with number of dogs groomed on the x-axis and maintenance cost on the y-axis. As the number of dogs groomed increases, maintenance cost increases.\" width=\"479\" height=\"287\" \/>\r\n\r\nSo from this graph, you can see that the more dogs groomed, the higher the maintenance cost, and it is rising in a somewhat linear manner too. This step, creating a scattergraph is done as a first step to see if our theory is correct, before we move on and do further analysis.\r\n<div class=\"\u201ctextbox\">\r\n<div class=\"textbox tryit\">\r\n<h3>Practice Questions<\/h3>\r\nhttps:\/\/assess.lumenlearning.com\/practice\/9ea75986-17f4-44d0-834a-bb9a6ced183f\r\n\r\n<\/div>\r\n<\/div>","rendered":"<div class=\"textbox learning-objectives\">\n<h3>Learning Outcomes<\/h3>\n<ul>\n<li>Define dependent variable and independent variable<\/li>\n<\/ul>\n<\/div>\n<p>Here is an overview of mixed costs, and creating a scattergraph to test our theory of the behavior of the costs.<\/p>\n<p><iframe loading=\"lazy\" src=\"\/\/plugin.3playmedia.com\/show?mf=7494710&amp;p3sdk_version=1.10.1&amp;p=20361&amp;pt=375&amp;video_id=rml9qRC4Vy4&amp;video_target=tpm-plugin-k64y3xbt-rml9qRC4Vy4\" width=\"800px\" height=\"450px\" frameborder=\"0\" marginwidth=\"0px\" marginheight=\"0px\"><\/iframe><br \/>\nYou are the maintenance supervisor at the local dog groomer. It is budget time, and you are working on your maintenance budget for the year. In an effort to work through your numbers, you notice that the maintenance cost has a fixed component to it. The hypothesis is that for each additional dog groomed, there is additional maintenance cost incurred. Let\u2019s look at a few months worth of activity:<\/p>\n<table style=\"border-collapse: collapse; width: 100%;\">\n<thead>\n<tr>\n<th style=\"width: 33.3333%;\">Month<\/th>\n<th style=\"width: 33.3333%;\">Number of Dogs Groomed<\/th>\n<th style=\"width: 33.3333%;\">Total Maintenance Cost<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td style=\"width: 33.3333%;\">July<\/td>\n<td style=\"width: 33.3333%;\">560<\/td>\n<td style=\"width: 33.3333%;\">790<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 33.3333%;\">August<\/td>\n<td style=\"width: 33.3333%;\">710<\/td>\n<td style=\"width: 33.3333%;\">850<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 33.3333%;\">September<\/td>\n<td style=\"width: 33.3333%;\">500<\/td>\n<td style=\"width: 33.3333%;\">740<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 33.3333%;\">October<\/td>\n<td style=\"width: 33.3333%;\">650<\/td>\n<td style=\"width: 33.3333%;\">820<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 33.3333%;\">November<\/td>\n<td style=\"width: 33.3333%;\">730<\/td>\n<td style=\"width: 33.3333%;\">910<\/td>\n<\/tr>\n<tr>\n<td style=\"width: 33.3333%;\">December<\/td>\n<td style=\"width: 33.3333%;\">800<\/td>\n<td style=\"width: 33.3333%;\">980<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Going back to our mixed cost formula:<\/p>\n<p>Y= total maintenance cost and will be plotted on the vertical axis of our graph. This cost is the dependent variable since the amount depends on the activity for the period.<\/p>\n<p>X= the activity or number of dogs groomed. This will be plotted on the horizontal axis and is the independent variable, because it is the factor that causes the variations in the cost.<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter wp-image-1421 size-full\" src=\"https:\/\/s3-us-west-2.amazonaws.com\/courses-images\/wp-content\/uploads\/sites\/2985\/2018\/04\/17002315\/Screen-Shot-2018-07-16-at-5.22.51-PM.png\" alt=\"A graph showing total maintenance cost with number of dogs groomed on the x-axis and maintenance cost on the y-axis. As the number of dogs groomed increases, maintenance cost increases.\" width=\"479\" height=\"287\" \/><\/p>\n<p>So from this graph, you can see that the more dogs groomed, the higher the maintenance cost, and it is rising in a somewhat linear manner too. This step, creating a scattergraph is done as a first step to see if our theory is correct, before we move on and do further analysis.<\/p>\n<div class=\"\u201ctextbox\">\n<div class=\"textbox tryit\">\n<h3>Practice Questions<\/h3>\n<p>\t<iframe id=\"assessment_practice_9ea75986-17f4-44d0-834a-bb9a6ced183f\" class=\"resizable\" src=\"https:\/\/assess.lumenlearning.com\/practice\/9ea75986-17f4-44d0-834a-bb9a6ced183f?iframe_resize_id=assessment_practice_id_9ea75986-17f4-44d0-834a-bb9a6ced183f\" frameborder=\"0\" style=\"border:none;width:100%;height:100%;min-height:300px;\"><br \/>\n\t<\/iframe><\/p>\n<\/div>\n<\/div>\n\n\t\t\t <section class=\"citations-section\" role=\"contentinfo\">\n\t\t\t <h3>Candela Citations<\/h3>\n\t\t\t\t\t <div>\n\t\t\t\t\t\t <div id=\"citation-list-288\">\n\t\t\t\t\t\t\t <div class=\"licensing\"><div class=\"license-attribution-dropdown-subheading\">CC licensed content, Original<\/div><ul class=\"citation-list\"><li>Independent vs. Dependent Variable. <strong>Authored by<\/strong>: Freedom Learning Group. <strong>Provided by<\/strong>: Lumen Learning. <strong>License<\/strong>: <em><a target=\"_blank\" rel=\"license\" href=\"https:\/\/creativecommons.org\/licenses\/by\/4.0\/\">CC BY: Attribution<\/a><\/em><\/li><\/ul><div class=\"license-attribution-dropdown-subheading\">All rights reserved content<\/div><ul class=\"citation-list\"><li>Scatter Diagram - Managerial Accounting - Cost Accounting. <strong>Authored by<\/strong>:  Accounting Instruction, Help, &amp; How To. <strong>Located at<\/strong>: <a target=\"_blank\" href=\"https:\/\/www.youtube.com\/watch?v=rml9qRC4Vy4\">https:\/\/www.youtube.com\/watch?v=rml9qRC4Vy4<\/a>. <strong>License<\/strong>: <em>All Rights Reserved<\/em>. <strong>License Terms<\/strong>: Standard YouTube License<\/li><\/ul><\/div>\n\t\t\t\t\t\t <\/div>\n\t\t\t\t\t <\/div>\n\t\t\t <\/section>","protected":false},"author":62559,"menu_order":9,"template":"","meta":{"_candela_citation":"[{\"type\":\"original\",\"description\":\"Independent vs. Dependent Variable\",\"author\":\"Freedom Learning Group\",\"organization\":\"Lumen Learning\",\"url\":\"\",\"project\":\"\",\"license\":\"cc-by\",\"license_terms\":\"\"},{\"type\":\"copyrighted_video\",\"description\":\"Scatter Diagram - Managerial Accounting - Cost Accounting\",\"author\":\" Accounting Instruction, Help, & How To\",\"organization\":\"\",\"url\":\"https:\/\/www.youtube.com\/watch?v=rml9qRC4Vy4\",\"project\":\"\",\"license\":\"arr\",\"license_terms\":\"Standard YouTube License\"}]","CANDELA_OUTCOMES_GUID":"bd56768f-15fc-41de-9afa-e4f7f4504c38, 5cf8c875-9f36-417b-a720-abb805972986","pb_show_title":"on","pb_short_title":"","pb_subtitle":"","pb_authors":[],"pb_section_license":""},"chapter-type":[],"contributor":[],"license":[],"class_list":["post-288","chapter","type-chapter","status-publish","hentry"],"part":106,"_links":{"self":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/288","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters"}],"about":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/types\/chapter"}],"author":[{"embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/users\/62559"}],"version-history":[{"count":13,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/288\/revisions"}],"predecessor-version":[{"id":4061,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/288\/revisions\/4061"}],"part":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/parts\/106"}],"metadata":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapters\/288\/metadata\/"}],"wp:attachment":[{"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/media?parent=288"}],"wp:term":[{"taxonomy":"chapter-type","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/pressbooks\/v2\/chapter-type?post=288"},{"taxonomy":"contributor","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/contributor?post=288"},{"taxonomy":"license","embeddable":true,"href":"https:\/\/courses.lumenlearning.com\/wm-accountingformanagers\/wp-json\/wp\/v2\/license?post=288"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}