As per the controllability, cost can be classified as controllable & uncontrollable costs. How will you DIFFERENTIATE them?

CA Intermediate · Cost and Management Accounting · MTP · May 2024
As per the controllability, cost can be classified as controllable & uncontrollable costs. How will you DIFFERENTIATE them?

Suggested Answer and Working Notes:

Controllable costs and Uncontrollable costs: Cost that can be controlled, typically by a cost, profit or investment centre manager is called controllable cost. Controllable costs incurred in a particular responsibility centre can be influenced by the action of the executive heading that responsibility centre. Costs which cannot be influenced by the action of a specified member of an undertaking are known as uncontrollable costs.

Topics: Introduction to Cost & Management Accounting

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