The more the cost base is composed of variable or direct costs,the more ______ managers have over the actual management of this cost base on a day-to-day basis.
A) influence
B) power
C) control
D) restraint
E) discipline

Question

Quizplus · Accepted Answer

When the cost base is composed mainly of variable or direct costs, managers have more control over the actual management of this cost base on a day-to-day basis. Direct costs are costs that can be easily traced to a specific product or service, and variable costs change as the level of output changes. This gives managers greater flexibility to manage costs by adjusting production levels or changing material and labor inputs. As a result, managers have greater control over the cost base and are able to make decisions based on the actual costs incurred.

The More the Cost Base Is Composed of Variable or Direct