Jacob is a department manager who recently instituted a new recognition program for his employees.He budgeted the cost of the new program at $10 per employee,but actual costs were $15 per employee.The cost associated with the recognition program would be considered which of the following kinds of cost?
A) Controllable cost
B) Opportunity cost
C) Fixed cost
D) Product cost

Question

Quizplus · Accepted Answer

The cost of the recognition program is a controllable cost because it was budgeted and planned by Jacob. Although the actual cost was higher than budgeted, he still had control over the decision to implement the program and could have adjusted the budget accordingly. Opportunity cost refers to the value of the next best alternative foregone and is not applicable here. Fixed cost is a cost that does not vary with changes in production or sales volume, and product cost is the cost of producing a good or service and is not relevant to this situation.

Jacob Is a Department Manager Who Recently Instituted a New