What is the Controllable Margin?
The controllable margin is the contribution margin less the controllable fixed costs. As all the costs included are controllable by the profit center manager, it is a useful measure to evaluate the managers performance.
The controllable margin is used when producing a Contribution Margin Income Statement to monitor and measure the contribution made by a profit center.
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Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.