Controllable and un-controllable variances:

The purpose of the standard costing
reports is to investigate the reasons for significant variances so as to identify the problems
and take corrective action. Variances are broadly of two types, namely, controllable and
uncontrollable. Controllable variances are those which can be controlled by the departmental
heads whereas uncontrollable variances are those which are beyond their control. For
example, price variance is normally regarded as uncontrollable if the price increase is due to
fluctuations of prices in the market. It becomes controllable if the production controller has
failed to place orders in time and urgent purchase was made at extra cost.