Distinguishing between controllable and noncontrollable costs on a performance report may result in:
A) an increase in the effectiveness of a cost management system.
B) a decrease in goal congruent behavior by managers.
C) an increase in the quality of performance information.
D) an increase in feelings of blame by managers.
E) an increase in the effectiveness of a cost management system and an increase in the quality of performance information.

Question

Quizplus · Accepted Answer

Distinguishing between controllable and noncontrollable costs helps managers focus on what they can influence, improving the cost management system's effectiveness (A) and enhancing the relevance and usefulness of performance information (C), thereby increasing its quality.

Distinguishing Between Controllable and Noncontrollable Costs on a Performance Report