Question

Is it true that indirect costs should never be included in the determination of controllable costs?

Answer 1

Indirect cost are costs like rent, utilities or general office expenses like stationary and controllable costs are those cost that can be influenced or reduced by the manager or the departments head. Now for majority of the indirect cost like rent it might not be possible to put it into the category of controllable cost but some of the indirect cost like stationary expenses, Factory overhead cost can be put in the category of the controllable cost and they can be managed more efficiently if currently the expenditure is excessive.