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"Controllable by whom?" should be the first consideration.
A controllable expense is one that the manager responsible for controlling that particular expense has some influence over. So if you look at any given fixed expense, it may be controllable by manager X, while it is uncontrollable by manager Y, if Y has no control over it.
In the short run, fixed costs may be controllable ORuncontrollable.
If the fixed expense is discretionary (for example, a fixed budget of $500 a year for his department's annual summer outing), the manager can cancel the outing without affecting production (except to the extent that department morale is affected, and that is not a measurable accounting cost.). The $500 would be a fixed controllable cost to the manager, because he can avoid the expense entirely by cancelling the outing.
However, the amount of monthly rent paid on a factory building is usually a fixed cost that the factory manager cannot change, and so it is a fixed uncontrollable cost to the manager because it is non-discretionary for the manager.
The major purpose of dividing variable and fixed costs into "controllable" and "uncontrollable" costs is to aid in evaluating a manager's performance, in order to to hold him responsible only for controlling the expenses that he or she could have controlled, i.e., those expenses that he or she had both the responsibility and the authority to control.
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Is rent an example of an fixed expense?
Yes normally rent is fixed expense and need to be paid even there is no production at all.
Is food a fixed or variable expense for dog owners?
Variable, it all depends on what brand and size the bag of food is as to what the price is
I am preparing expense budget for 5 years how do i show and calculate depreciation expense?
First of all capital expenditure should be estimated and after that on the basis of fixed assets purchase assumption depreciation can be calculated.
Is shipping expense a mixed cost?
Yes. Shipping cost is a combination of fixed and variable expense. Fixed expense of shipping would be payment and insurance. Variable expense of shipping would be fuel cost.
What is meant by term marketing environment?
Marketing Environment is the sum total of all the forces that affects the firm's or a business organisation's decisions. Because, the firm's internal environment is controllable to a certain extent, so marketing environment basically includes the firm's external uncontrollable environment.
Fixed asset depreciation schedule?
Fixed asset depreciation schedule shows the calculation of yearly depreciation expense which is scheduled to be charged to income statement for all fixed assets and the total amount of depreciation applicable to specific income statement of business.
How does depreciating expense differ from operating expenses?
Operating Expenses are the cost of doing business and are paid out of the company's cash or in some cases paid with Bonds, Stocks, or Dividends, either way, these expense will affect the Cash of the company and it's worth. Their are two accounts for Depreciation one is Accumulated Depreciation. This is an Contra-Asset Account and is listed on the Balance Sheet under assets and is deducted from the related asset account. Depreciation Expense is the expense we claim from Accumulated Depreciation and though it is an expense it does not affect our Cash. We do not actually "pay" this expense. Depreciation is the decline in usefulness of a Fixed Asset. Remember, all Fixed Assets (except Land) lose their usefulness. Decreases in the usefulness of assets that are used in generating revenue are recorded as expenses. However, such decreases for fixed assets are difficult to measure. For this reason, a portion of the cost of the fixed asset is recorded as an expense each year for its useful life.
What is a fixed asset equipment depreciation schedule?
It is the schadule to show how fixed assets will depreciate in their useful life and show all information according to useful life the depreciation expense charge to income statement and to dispose off them in the end.
Is telephone expense a fixed cost or variable cost?
It depends on the plan you have. Mine is a fixed expense because long distance, texting and so on are all unlimited. It costs a little more up front but if I have an emergency and need to make a lot of calls that I don't normally make it doesn't cost me extra. Without an unlimited plan I would have to pay for each call so if my calling increased for some reason, my bill would fluctuate.
Do you need to accrue for unpaid fixed asset?
If you purchased a fixed asset and you didn't pay for it all when you bought it, then you took on a debt liability. This does not accrue. It's there in full until it is paid off. Interest expense is recorded in its own account too. Interest accrues.
Is insurance an administrative expense or selling expense?
Insurance is an administrative expense as administration is authorized to do all these kind of expenses.
What is an uncontrollable variable?
An uncontrolled variable is a characteristic that you allow to stay random during the sampling. For example, if you collect data on people of all eye colours, then eye colour is an uncontrolled variable.
