Which of the following is an example of a controllable cost?

• A. Rates to the local authority
• B. Commission to sales personnel
• C. Interest on borrowings
• D. Depreciation

Answer: (B)

Controllable costs are expenses a manager can influence in the short term through decisions and policies. Commission to sales personnel is a controllable cost because management can set or adjust the commission rate or structure to affect sales performance. In contrast, rates to the local authority are typically fixed charges set externally and not easily changed in the short run. Interest on borrowings depends on existing debt terms and market rates, and while refinancing is possible, it isn’t a routine short-term control. Depreciation follows asset cost, useful life, and accounting policy, so it isn’t something adjusted month to month. Therefore, the controllable cost shown is the commission to sales personnel.