Asked by Riyan George on Jun 24, 2024

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To help assess how well a manager has controlled costs, actual costs should be compared to what the costs should have been for the actual level of activity.

Controlled Costs

Costs that can be influenced or managed by decisions made by managers or company officials.

Actual Costs

Actual costs refer to the genuine expenses incurred in the production, acquisition, or sale of products or services, including materials, labor, and overhead expenses.

Actual Level

The real, observed value or volume of output, production, or activity in a given period.

  • Learn about the role that fixed and variable costs play in budget establishment and the appraisal of financial results.
  • Understand the process and importance of comparing actual costs and revenues to budgeted amounts.
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MJ
Mariahbay JonesJun 25, 2024
Final Answer :
True
Explanation :
This statement is true. Comparing actual costs to what the costs should have been for the actual level of activity helps evaluate if a manager was successful in controlling costs. This analysis is commonly done through variance analysis, where the difference between actual costs and budgeted or standard costs is calculated and examined.