The purpose of classifying variances as controllable and uncontrollable in variance analysis is to emphasize the need for control and corrective action. This classification allows managers to identify the areas of the organization that they have control over and can take action to improve.

Controllable Variances:
1. Definition: Controllable variances are those that can be directly influenced and controlled by the actions of managers and employees within the organization.
2. Example: For example, a controllable variance may arise from a change in the input costs of a production process, which can be addressed by negotiating better prices with suppliers or finding alternative suppliers.
3. Importance: By classifying variances as controllable, managers can focus their attention on identifying the causes of these variances and taking corrective actions to reduce or eliminate them.

Uncontrollable Variances:
1. Definition: Uncontrollable variances are those that are beyond the control of managers and employees within the organization.
2. Example: For example, an uncontrollable variance may arise from a change in market demand for a product, which is influenced by external factors such as economic conditions or competitor actions.
3. Importance: By classifying variances as uncontrollable, managers can recognize that these variances are not a result of their actions or decisions and should not be the focus of their efforts to improve performance.

Emphasizing the Need for Control and Corrective Action:
1. Importance: Classifying variances as controllable and uncontrollable highlights the importance of control and corrective action in managing variances.
2. Control: Managers are responsible for controlling the controllable variances by implementing appropriate measures to prevent or minimize them.
3. Corrective Action: Managers need to take corrective action when controllable variances occur, such as adjusting production processes, reallocating resources, or revising budgets.

Conclusion:
By classifying variances as controllable and uncontrollable, variance analysis helps managers identify the areas they can control and take action to improve performance. It emphasizes the need for control and corrective action, enabling managers to focus on reducing or eliminating controllable variances and recognizing that uncontrollable variances are beyond their control.