Asked by Jhollo Redondo on May 11, 2024
Verified
A cost item is considered to be controllable if there is not a large difference between actual cost and budgeted cost for that item.
Controllable Cost
A cost over which a manager has control.
Actual Cost
The actual expense incurred to acquire an asset or service, including all costs necessary to bring the asset into use or to complete the service.
- Recognize the significance of discerning between controllable and non-controllable expenses in responsibility accounting.
Verified Answer
CB
Christiane BlessmannMay 13, 2024
Final Answer :
False
Explanation :
A cost item is considered controllable if a manager has the power to influence its amount, not necessarily related to the difference between actual and budgeted costs.
Learning Objectives
- Recognize the significance of discerning between controllable and non-controllable expenses in responsibility accounting.
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