Which of the following costs are most likely to be controllable at the production supervisor level?

• A. Raw material purchase prices
• B. Direct labor costs
• C. Depreciation on factory equipment
• D. Property taxes on the manufacturing facility

Answer: (B)

Verified step by step guidance

1. Understand the concept of controllable costs: Controllable costs are those that a manager or supervisor has the authority to influence or change within their area of responsibility during a specific time period.
2. Analyze each cost option provided in the problem: For each cost, determine whether the production supervisor has direct control over it. For example, raw material purchase prices are typically negotiated by the purchasing department, not the production supervisor.
3. Focus on direct labor costs: Direct labor costs are associated with the wages of workers directly involved in production. The production supervisor can influence these costs by managing work schedules, productivity, and overtime.
4. Evaluate depreciation on factory equipment: Depreciation is a fixed cost based on the historical cost of the equipment and its useful life. The production supervisor cannot control this cost.
5. Consider property taxes on the manufacturing facility: Property taxes are determined by local government and are not within the control of the production supervisor. Therefore, direct labor costs are the most likely to be controllable at the production supervisor level.