The principle that managers should only be held responsible for the costs and investments they have the ability to influence directly. Understanding and applying the controllability concept is crucial for effective managerial accountability and performance evaluation.
Uncontrollable costs are expenses that cannot be directly managed or influenced by a specific level of management within an organization. These costs are important for accurate performance measurement and often lead to differing opinions on their classification.
Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.