Question

Distinguish between controllable and uncontrollable costs.

Answer 1

	Controllable cost	Uncontrollable cost
1.	Controllable costs are those costs which can be controlled or regulated by an organisation and its management.	Uncontrollable costs are those costs which are beyond the administrative control of an enterprise.
2.	e.g., inventory cost, direct labour cost, direct material cost, direct expenses controllable by the shop level management.	e.g., the cost of obsolescence. a foreman incharge of a tool room can only control costs pertaining to the same department and the matters that come directly under his control, not the costs apportioned to other departments. The expenditure that is controllable by an individual may be uncontrollable by another individual.