Question

Explain Controllable And Uncontrollable Costs?

Answer 1

Answer:

Explanation:

Controllable Costs

Controllable costs are costs that can be influenced or regulated by the manager or head responsible for it.

For example: direct materials, direct labor, and certain factory overhead costs are controlled by the production manager. Another example: the sales manager has control over the salary and commission of sales personnel.

Uncontrollable Costs

From the term itself, uncontrollable costs are those that are not under the control of a specified manager.

These cannot be influenced by decisions or actions of the manager. These costs are imposed by the top management or allocated to several departments.

For example, a company-wide advertising cost that is allocated by the central office to different departments is not under the control of the department heads.