Explain controllable and uncontrollable costs.

Explain controllable and uncontrollable costs.


Controllable Cost are the costs which can be influenced by the action of a specified member of the undertaking. They are incurred in a particular responsibility centres can be influenced by the action of the executive heading that responsibility centre. For example: Direct labour cost, direct material cost, direct expenses controllable by the shop level management.

Uncontrollable Cost are the costs which cannot be influenced by the action of a specified member of the undertaking. For example: a foreman incharge of a tool room can only control costs pertaining to the same department and the matters which come directly under his control, not the costs apportioned to other department. The expenditure which is controllable by an individual may be uncontrollable by another individual.

Explain Normal and Abnormal Costs.
Normal Cost are the normal or regular costs which are incurred in the normal conditions…
Explain Opportunity Cost and Differential Cost.
Opportunity Cost is the cost incurred by the organisation when one alternative is selected over another..
Define Sunk Cost.
Sunk Cost is the sum that has already been incurred and cannot be recovered by any decision made now or in future. …
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