Skip to content

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

Kaveri Plastics' moulding department manager has no authority over the following items. Which one is non-controllable for that manager but is likely to be controllable by the top management?

The factory rent under a lease signed by the board is non-controllable for the department manager because that manager has no authority over it. Top management made the decision. Wastage, approved overtime and idle-running power are within the departmental manager's influence.

  1. AIndirect material wastage in the moulding department
  2. BOvertime wages approved by the department manager
  3. CRent of the factory building under a 10-year lease signed by the boardCorrect
  4. DPower consumed by machines in the department due to idle running

Explanation

Lease rent was fixed by the board, so the department manager cannot influence it; it is non-controllable at that level, though top management could decide on the lease. The other three items arise from the manager's own supervision and approvals, so they are controllable at departmental level.

Did you get it right without looking?

One question tells you little. A timed set on Classification of Costs (CAS 1) shows your real accuracy, how long you take and where you lose marks.

Practise Classification of Costs (CAS 1)Free diagnostic mock

More Classification of Costs (CAS 1) questions