As far as accounting is concerned, an independent value is a factor that drives a change in the dependent variable total amount. It causes a mixed cost to either decrease or increase. In reality, several independent variables that influence the aggregate dependent variable exist (Ary et al., 2018). For instance, monthly electricity cost as a dependent variable could have independent variables such as the physical size of products, operator’s level of skill, external humidity and temperature and electric non-production machines. Again, changes in product price influence the quantity of the units sold as customers will tend to go for lower prices to purchase additional units unlike when the prices are high.
Independent variables that influence the quantity of sales include weather, customer demographics and possibly store location. Customer demographics comprise factors such as gender, age, family status, income level and occupation. Such factors as a result influence customer need, therefore, affecting sales and ultimate profits. For example, a store situated in a densely populated urban area will record higher sales unlike a store located in a sparsely populated rural. Equally, many customers will go shopping in pleasant weather as compared to the few who will risk buying in stormy weather (Lin & Hsieh, 2010).
An expense is another example of an independent variable. Expenses will depend on factors like facility rental rates, labor wage rates and the prices of raw materials. The prices of raw materials remain constant no matter how a business spends on such materials. Similarly, facility rental and labor wage rates affect the cost structure of the company although the owner can do nothing about them
In an experiment, the inclusion of multiple independent variables creates different levels and conditions. Here, the level of each independent variable is combined with others producing the possible outcomes of the combination. This way, each combination now grows out to be a condition. Assignment of participants to conditions will as well create different conditions (Lin & Hsieh, 2010). In such a case each participant is examined with a single condition. All independent variables are exploited between subjects.
Dependent variables changes depending on the values of other variables. Regression analysis is an instrument that can be used to measure dependent variables. A perfect example is when the analyst attempts to predict the price of a particular stock by applying debt-asset ratio, profit and dividend per share of a given company (Leech et al., 2013). Theoretically, there is no limited number of independent variables to be used. Conversely, the results of most complex models bearing so many variables can be confusing.
References
Ary, D., Jacobs, L. C., Irvine, C. K. S.,& Walker, D. (2018).Introduction to research in education. Cengage Learning.
Leech,N., Barrett, K., & Morgan, G. A. (2013). SPSS for intermediate statistics: Use and interpretation. Routledge.
Lin,S. H., & Hsieh, P. J. (2010). Book Review: Kline, RB (2005).Principles and Practice of Structural Equation Modeling. New York: Guilford.366 pp., $40.50 paperback, ISBN 978-1-57230-690-5. Research on Social Work Practice, 20(1), 126-128.