Well....That would be the control of costs
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
Controllable costs are costs that a manager or department has authority and responsibility over, such as direct material cost. With uncontrollable costs, management has no control over the cost or when they must be paid, such as liability insurance.
Controllable spending is simply spending that a given manager has control over. Controllable spending is examined in evaluating the budget performance of the manager who had control, in seeing how well he managed costs for his unit.
payroll is not controllable cost.
Electricity cost not a controllable cost. The manager cannot influence this type of expense. To the extent where a cost cannot be managed it is indeed a non controllable, now for electricity, to the extent where consumption can be raised or lowered it becomes a controllable cost. If the consumption can be optimized through processes or equipments it then is a controllable cost.
It is done so to keep control on costs as direct costs are controllable while indirect costs are not.
controllable risk factors
Controllable costs are costs that a manager or department has authority and responsibility over, such as direct material cost. With uncontrollable costs, management has no control over the cost or when they must be paid, such as liability insurance.
1.11.5 By Controllability- Costs here may be classified into controllable and uncontrollable costs. (a) Controllable costs - These are the costs which can be influenced by the action of a specified member of an undertaking. A business organisation is usually divided into a number of responsibility centres and an executive heads each such centre. Controllable costs incurred in a particular responsibility centre can be influenced by the action of the executive heading that responsibility centre. For example, Direct costs comprising direct labour, direct material, direct expenses and some of the overheads are generally controllable by the shop level management. (b) Uncontrollable costs - Costs which cannot be influenced by the action of a specified member of an undertaking are known as uncontrollable costs. For example, expenditure incurred by, say, the Tool Room is controllable by the foreman incharge of that section but the share of the tool-room expenditure which is apportioned to a machine shop is not to be controlled by the machine shop foreman The distinction between controllable and uncontrollable costs is not very sharp and is sometimes left to individual judgement. In fact no cost is uncontrollable; it is only in relation to a particular individual that we may specify a particular cost to be either controllable or uncontrollable
controllable risk factors
Controllable spending is simply spending that a given manager has control over. Controllable spending is examined in evaluating the budget performance of the manager who had control, in seeing how well he managed costs for his unit.
Non controllable costs are those things over which the manager has no control. One example is the need to replace a major piece of equipment due to breakage.
(a) By time when computed historic costs standard costs (b) By financial costing Revenue costs capital costs (c) By responsibility controllable costs uncontrollable costs (d) By identification with stock product costs period costs (e) By tracing costs to end products direct costs indirect costs
Controllable Variables are: utilization, work force level, production resource employment, and production lot size/sequencing of production runs. The major costs include: equipment installment, production & setup and inventory holding/processing.
Non-controllable costs are expenses that a manager has no authority to influence or change. One example is an employee's rate of pay.
payroll is not controllable cost.
I have several sentences for you.That horse is not controllable.The scientific variable is controllable in the laboratory.I want a controllable temper!