Question

All of the following are associated with reporting controllable costs except:a. At lower levels, management have fewer controllable costs.b. Lower-level managers are responsible for detailed costs and so receive detailed reports.c. Responsibility and control broaden for higher-level managers.d. Higher-level managers receive summarized reports for focusing on broader issues.e. Uncontrollable costs are allocated equally.

Answer 1

Answer:

a. At lower levels, management have fewer controllable costs

Explanation:

The opposite is true, lower-level management have more controllabe costs than higher level management because top management focuses on the general strategy of the firm, while lower management focuses on the specific production processes.

It is in these specific production processes that many controllable costs arise. A production line supervisor (part of lower-level management) can directly control some variable costs such as energy used, amount of input, or even work hours.