Asked by Sallye Ferguson on Jul 02, 2024
Verified
Kevin Smith is the production manager of Mydas Ltd, a company that manufactures a range of motor vehicles. His role includes overseeing the entire production process of Mydas Ltd's three product lines: family cars, sports cars, and motor cycles. Once completed, all the cars are shipped within Australia and to China and Korea by the company's shipping and transportation department.
Identify two examples of controllable costs and two examples of uncontrollable costs for Kevin. Explain your answer.
Controllable Costs
Expenses that can be directly managed or influenced by a specific manager or management level within an organization.
Uncontrollable Costs
Expenses over which a manager or business has no direct control, often determined by external factors.
Production Manager
A professional responsible for overseeing the production process within a manufacturing facility, ensuring that goods are produced efficiently, safely, and meet quality standards.
- Understand the concepts of controllable and uncontrollable costs.
Verified Answer
Uncontrollable costs include advertising (Kevin is only the production manager so he is not involved in advertising) and shipping costs (the question suggests that Kevin has to use the company's shipping and transportation department, so he does not have control over shipping costs).
Learning Objectives
- Understand the concepts of controllable and uncontrollable costs.
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