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Hello Sir,
Can you please explain me what is a “committed fixed cost”? Is it same as that of Committed cost that we usually cover in Relevant Costing?And sir it has been mentioned in BPP’s study text that “variable costs within department are thought to be controllable in the shirt term because manager can influence the efficiency with which resources are being used, even if they cannot do anything to raise or lower price level”.
Sir can we here also add that variable cost such as material cost are controllable as we might start using a cheaper material which is of almost the same quality or maybe shit to another supplier who offers same material at a discount “?
Thankyou in advance:)
Yes – it is the same as a committed cost.
Your second point is generally true (although I do not know in what context the statement in the study text was made).
Thankyou Sir.
Sir the second point has been mentioned in context of Controllability. That is, why Variable Cost can be considered as a Controllable Cost.
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