Controllable margin is most useful for
A) external financial reporting.
B) preparing the master budget.
C) performance evaluation of profit centers.
D) break-even analysis.

Question

Quizplus · Accepted Answer

Controllable margin is a measure of a profit center's performance that includes only those costs that can be controlled by the manager of the center. Therefore, it is most useful for performance evaluation of profit centers. Controllable margin is not generally used for external financial reporting or preparing the master budget. While it can be used in break-even analysis, it is not the most commonly used measure for that purpose.

Controllable Margin Is Most Useful for