Question

Theta, Inc., a manufacturing company, has two major activities that drive the selling costs of the firm, namely commission paid to sales agents on the number of sales initiated and number of dispatches made. In the case of two explanatory variables, the linear equation is expanded to include the additional variable:

Y = F + V1X1 + V2X2, where
X1 = Number of sales initiated by representatives
X2 = Number of dispatches made
F = Fixed cost component
Y = Total selling costs
Which of the following is a dependent component in the equation above?
a. Total selling costs
b. Fixed cost component
c. Number of dispatches made
d. Number of sales initiated by representatives

Answer 1

The dependent component in the equation provided is the Total selling costs (Y), as it changes in response to the fixed cost component, the number of sales initiated, and the number of dispatches made.

Step-by-step explanation:

In the equation provided by Theta, Inc., a manufacturing company, the dependent component is Total selling costs (Y). This is because the total selling costs depend on the other variables in the equation: the fixed costs (F), the number of sales initiated by representatives (X1), and the number of dispatches made (X2).

It's important to note that the dependent variable is the one that changes in response to the other variables, which in this case are Fixed cost component, the Number of sales initiated by representatives, and the Number of dispatches made. These three are known as independent variables because they cause changes in the dependent variable, not the other way around.