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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › What is differrence between controllable and avoidable cost?
Could anyone explain for me the differrence between 2 terms above, I’m very confused about this, I think 2 terms have the same meaning. Thank you!
A controllable cost is one that is controlled by the divisional manager (as opposed to being controlled by the head office).
An avoidable cost is a cost that would not exist were the division to be closed (or if a product were to be stopped being produced) – whether or not that cost is controlled by the relevant manager.