A controllable cost is best described as

A controllable cost is best described as

• A. Cost over which the manager has no control (Insurance, mortgage payments, licenses)
• B. Cost that varies with sales
• C. Cost that is always fixed
• D. Cost over which the manager can control (Food, Labor, cleaning supplies)

Answer: (D)

Controllable costs are those a manager can influence in the short term through day-to-day decisions. A manager can adjust how much is spent on items like food, labor, and cleaning supplies by changing menu portions, scheduling, purchasing quantities, and usage. Non-controllable costs are fixed or contracted expenses outside the manager’s immediate influence, such as insurance premiums, mortgage payments, and licenses. While a cost that varies with sales is a variable cost, what matters here is whether the manager can actively adjust it in the period. Since food, labor, and cleaning supplies are within the manager’s control, they are the best examples of controllable costs.

Controllable costs are those a manager can influence in the short term through day-to-day decisions. A manager can adjust how much is spent on items like food, labor, and cleaning supplies by changing menu portions, scheduling, purchasing quantities, and usage. Non-controllable costs are fixed or contracted expenses outside the manager’s immediate influence, such as insurance premiums, mortgage payments, and licenses. While a cost that varies with sales is a variable cost, what matters here is whether the manager can actively adjust it in the period. Since food, labor, and cleaning supplies are within the manager’s control, they are the best examples of controllable costs.