What are controllable and uncontrollable costs?

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Business

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sciencesolve's profile pic

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As the name indicates, uncontrollable costs are the costs imposed by a external authorities, such as, for example, the rent of the company's unit that the company needs to pay. Hence, fixed costs may be introduced in the category of uncontrollable costs. 

Controlable costs may be held in check but only to some extent, such as, for example, the cost of materials involved in production of goods and services. Hence, the variable costs may be included in this category.

vinishparikh's profile pic

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Controllable cost - They are those which can be controlled if one pays attention so for example for making a product only 2 labors are required but 3 are working then you can control the cost of 1 labor.

Uncontrollable cost - They are those which cannot be controlled and company has to pay it no matter what happens, For example if company has taken a place on rent for production then if it produces 100 units or 1000 units or no units the rent will remain the same.

violet101's profile pic

Posted on

uncontrollable costs as the name implies are costs that cannot be inflenced by the management and some costs are controllable in the long run but not in the short run like some fixed costsare uncontrollable in the short term although some fixed costs may be discretionary but there seems not to be much about controllable costs since its really not within the control of the various center managers. Assets and liabilities are only controllable to the extent that the investment center manager has authority to increase or decrease them

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