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What is differrence between controllable and avoidable cost?

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA MA – FIA FMA › What is differrence between controllable and avoidable cost?

  • This topic has 1 reply, 2 voices, and was last updated 9 years ago by John Moffat.
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  • August 13, 2016 at 9:14 pm #333014
    kynhonglongbong
    Member
    • Topics: 2
    • Replies: 19
    • ☆

    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!

    August 14, 2016 at 7:39 am #333057
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54753
    • ☆☆☆☆☆

    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.

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