Final answer:
Managers are expected to control controllable costs, which they can influence. Fixed costs are often sunk costs and thus are generally not controllable. Variable costs, which can be influenced by changes in production levels, are within the remit of what a manager can control. The correct option is c.
Step-by-step explanation:
The type of costs that managers are expected to keep within predefined boundaries or limits are controllable costs. These are expenses a company or individual manager can influence or control.
In contrast, fixed costs such as rent, which are not related to the level of production, and sunk costs, which are expenditures that have already occurred and cannot be recovered, are generally not controllable in the short run.
Variable costs, however, are associated with the production of goods or services and are controlled by managing production levels.
Fixed costs are often sunk costs that, once incurred, cannot be recovered, and thus should not affect future economic decisions.
Unlike fixed costs, variable costs respond to changes in production and can convey information about the firm's ability to manage expenses in relation to output levels. The management's goal is to optimize production to ensure total revenue exceeds these costs to earn a profit. The correct option is c.