To illustrate, assume that a manufacturer wants to estimate its total electricity cost for each month.

*The total electricity cost will be the dependent variable.*Since the manufacturer's machines use large amounts of electricity, the total cost of electricity is dependent on the number of machine hours. In this example, the machine hours will be an independent variable. (It is likely that there will be many independent variables that cause the change in the amount of the dependent variable.)

The dependent variable is usually expressed as

*y*or

*y'*(the estimated amount of y) and the amount is referenced on a graph's y-axis. (An independent variable is expressed as x and is referenced on a graph's x-axis.) Hence the equation for the monthly electricity cost will be y = a + bx, which signifies that the total electricity cost (y) for a specific month is equal to a fixed cost (a) plus a variable cost rate (b) multiplied times the number of machine hours (x) occurring during the month.

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