ACCA Applied Knowledge · Management Accounting · Cost classification
Which of the following is a controllable cost from the viewpoint of a department manager who has authority over departmental spending?
Departmental stationery usage decided by the manager is controllable. A controllable cost is one the manager can significantly influence through their own decisions, whereas allocated head office charges, group asset depreciation and centrally negotiated rent are set by others.
- ADepartmental stationery usage decided by the managerCorrect
- BHead office management charge allocated to the department
- CDepreciation on a building owned by the group
- DRent set by a group-wide lease negotiated centrally
Explanation
A controllable cost is one the manager can influence through their own decisions. Stationery usage falls within the manager's authority. The head office charge, group building depreciation and centrally negotiated rent are determined by others, so they are uncontrollable at departmental level.
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