The principle of controllability is that managers of responsibility centres should only be held accountable for costs over which they have some influence.  

Budgetary control is based around a system of budget centres. Each budget centre will have its own budget and a manager will be responsible for managing the budget centre and ensuring that the budget is met. 

Budgetary control and budget centres are therefore part of the overall system of responsibility accounting within an organisation. 

Controllable costs are items of expenditure which can be directly influenced by a given manager within a given time span.  

Care must be taken to distinguish between controllable costs and uncontrollable costs in variance reporting. The controllability principle is that managers of responsibility centres should only be held accountable for costs over which they have some influence. From a motivation point of view this is important because it can be very demoralising for managers who feel that their performance is being judged on the basis of something over which they have no influence. It is also important from a control point of view in that control reports should ensure that information on costs is reported to the manager who is able to take action to control them. 

Responsibility accounting attempts to associate costs, revenues, assets and liabilities with the managers most capable of controlling them. As a system of accounting, it therefore distinguishes between controllable and uncontrollable costs. 

Most variable costs within a department are thought to be controllable in the short term because managers can influence the efficiency with which resources are used, even if they cannot do anything to raise or lower price levels. 

A cost which is not controllable by a junior manager might be controllable by a senior manager. For example, there may be high direct labour costs in a department caused by excessive overtime working. The junior manager may feel obliged to continue with the overtime to meet production schedules, but his senior may be able to reduce costs by hiring extra full-time staff, thereby reducing the requirements for overtime. 

A cost which is not controllable by a manager in one department may be controllable by a manager in another department. For example, an increase in material costs may be caused by buying at higher prices than expected (controllable by the purchasing department) or by excessive wastage (controllable by the production department) or by a faulty machine producing rejects (controllable by the maintenance department). 

Some costs are non-controllable, such as increases in expenditure items due to inflation. Other costs are controllable, but in the long term rather than the short term. For example, production costs might be reduced by the introduction of new machinery and technology, but in the short term, management must attempt to do the best they can with the resources and machinery at their disposal.