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CMA Foundation · Fundamentals of Financial and Cost Accounting · Classification of Costs (CAS 1)

In cost classification, a cost is called controllable when:

A cost is controllable when the manager in charge of a cost centre can influence its amount through their own decisions within a given period. Behaviour with output, traceability to units or one-time occurrence describe other classifications, not controllability.

  1. AIt can be influenced by the decision of the manager responsible for the cost centre within a given periodCorrect
  2. BIt varies in direct proportion to the level of output
  3. CIt can be traced to a single cost unit economically
  4. DIt is incurred only once in the life of a project

Explanation

A controllable cost is one whose amount a specified manager can influence by their own action in the relevant period. Variability with output relates to variable cost, traceability relates to direct cost, and one-time incurrence has no link to controllability. So the first option is the only correct one.

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