ECONOMICS

Detailed explanation-1: -What are the Controllable Costs? The controllable costs are the costs that can be managed and changed in the short-term horizon based on business requirements and needs. Examples of such costs include advertisement, direct material, donations, compensation, etc.

Detailed explanation-2: -Factory cost: This is made up of prime cost plus factory overhead, which includes indirect wages, indirect material and indirect expenses. Factory cost is also known as works cost, production cost, or manufacturing cost.

Detailed explanation-3: -Generally, almost all direct costs such as material cost, labor costs, and certain overhead expenses are controllable by the actions of the lower levels of management. On the other hand, uncontrollable costs are not in control of the management. They cannot be influenced by any action taken by managers or the firm.

Detailed explanation-4: -Controllable costs purview include those for direct labor, direct supplies, donations, training, bonuses, memberships, dues, and overhead. Overhead is another cost that may be managed. Examples of uncontrollable costs include rent, utilities, a share of administrative overhead, and insurance fees.