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Classification of costs for control

Costs should be allocated to the individual who is responsible for incurring them. This is known as responsibility accounting and is based on the recognition of individual areas of responsibility which are known as responsibility centres.

Controllable and non-controllable costs

Costs should be classified according to whether they are controllable or non-controllable by the manager of responsibility centre.

Controllable cost – a cost which is reasonably subject to regulation by the manager of the responsibility centre. If it is not then it is uncontrollable.

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This entry was posted on Saturday, February 16th, 2008 at and is filed under Accounts.You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.