Choice "C" is correct. Controllable margin is computed as contribution margin net of controllable costs. Controllable costs represent those fixed costs that managers can impact in less than one year.Choice "b" is incorrect. Controllable margins are specifically defined as contribution margin less controllable fixed costs. Although the reporting objective is to most clearly define those margins for which a manger is responsible, the description relates to the components described in the correct answer.Choice "d" is incorrect. Controllable margins are specifically defined as contribution margin less controllable fixed costs and are not limited to direct costs.Choice "a" is incorrect. Controllable margins are specifically defined as contribution margin less controllable fixed costs and do not contemplate all costs directly associated with strategic objectives regardless of control.
