ACCA Applied Knowledge · Management Accounting · Cost classification
Which of the following best describes a controllable cost?
A controllable cost is one that a specified manager has authority to influence within a given period. It is distinct from variable costs, which change with activity, and direct costs, which are traceable to cost units.
- AA cost that a specified manager can influence within a given periodCorrect
- BA cost that varies with the level of activity
- CA cost that can be traced to a cost unit
- DA cost that has already been incurred
Explanation
Controllability relates to a manager's authority to influence a cost in a period. Variability relates to activity, traceability to direct versus indirect, and already incurred costs are sunk.
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