The Asymmetrical Behavior of Cost: Evidence from Jordan

Abu-Serdaneh, Jamal

doi:10.5539/ibr.v7n8p113

Cited by 26 publications

(31 citation statements)

References 36 publications

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“…Something similar was also presented by Abu-Serdaneh [23] in his study, when he discovered antisticky cost behaviour for the costs of goods sold and selling expenses, while the cost behaviour for SG&A and administration costs was found to be symmetrical, exhibiting neither stickiness nor anti-stickiness. The CGS model shows an increased degree of stickiness for companies with high asset intensity, whereas a lesser degree of stickiness was discerned for free cash flow.…”

Section: Literature Reviewsupporting

confidence: 74%

“…Such cost behaviour is referred to as rigid or fast-moving. [23] For instance, Grolms [24] discusses this issue, describing the concept of "Kostenremanenz" in Germany, and states that this problem appeared in the first half of the 20th century. The importance of this issue is also the subject of a study by Japanese authors Pichetkun and Panmanee, [25], who utilized regression analysis for the behaviour of costs and their explanation of the causes of sticky costs.…”

Section: Literature Reviewmentioning

confidence: 99%

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Perception of cost behaviour in industrial firms with emphasis on logistics and its costs

Новак¹,

Hrušecká²,

Macurová³

2018

FME Transactions

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Results are presented from quantitative research as part of a project on cost variability and cost management systems. The main objective was to analyze principal findings stemming from determining perception of cost behaviour in practice of industrial firms. Special attention was paid to selected cost groups, especially logistics costs. The main part presents results verified through statistical inspection of dependence relations. Key discoveries comprise significant drawbacks for manufacturing enterprises and reservations they hold about overhead cost management. Additionally, it was found that the share of overheads remained relatively high. Furthermore, confirmation was made on the close differences between company size and diligence paid to managing variable and fixed costs. It was also confirmed that senior executives were uninformed about asymmetric cost behaviours or the influence of factors beyond production capacity. Logistics costs were identified from the perspective of the cost behaviour problem. Crucial findings are discussed in the final part of the paper.

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Section: Literature Reviewsupporting

confidence: 74%

Section: Literature Reviewmentioning

confidence: 99%

Perception of cost behaviour in industrial firms with emphasis on logistics and its costs

Новак¹,

Hrušecká²,

Macurová³

2018

FME Transactions

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“…The concept of cost stickiness, is an asymmetric behaviour of costs that depends on the changes in sales decisions, especially when sales decline [8]. The same thing about the sticky costs is also defined by Serdaneh as an asymmetrical behaviour of costs where the rigid cost incurred in effect of the changes of activity [9]. Ratnawati and Nugrahanti define that sticky cost will be indicated in disproportionate cost changes when sales activity increase and decrease [4].…”

Section: B Sticky Costmentioning

confidence: 99%

Cost Stickiness: Behavior and Factors

Zulfiati¹,

Gusliana²,

Nuridah³

2020

Proceedings of the Annual International Conference on Accounting Research (AICAR 2019)

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The objective of the study is to analyse the sticky cost behaviour and the factors that affect the cost stickiness on manufacturing companies listed in Indonesia Stock Exchange. The behavior of sticky cost in this study is found by analyzing selling, general and administrative costs which are categorized into several industry groups to observe the annual degree of sticky cost of each group of industry. In addition, the factors that affect the cost stickiness are capital intensity ratio, employee intensity ratio, incentive management as measured by free cash flow, and the control variable, firm size. The method used in this study is multiple linear regression analysis using the equation as measured by Anderson, Banker and Janakiraman. The sample is determined by purposive sampling method with the number of samples of 97 companies during the period 2014-2018. The results of this study are that sticky cost behavior occurs in all manufacturing companies in Indonesia. The largest and smallest degrees of sticky cost occur in animal feed and other sectors, which is as proof that the company of such sectors has inconsistent management in supervising and controlling selling, general and administrative costs. Furthermore, the results of the factors affecting the cost stickiness show that: 1) capital intensity ratio does not influence the degree of cost stickiness, 2) employee intensity ratio affects the degree of cost stickiness, 3) free cash flow does not affect the degree of cost stickiness, and 4) firm size of control variable affects the degree of cost stickiness.

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“…Однак сучасні емпіричні дослідження документують асиметричну відповідь витрат на збільшення чи зменшення обсягів виробництва. Асиметричні витрати -це феномен, за якого реакція витрат на зниження ділової активності менша або більша, ніж реакція витрат на збільшення активності; така поведінка витрат ідентифікується як «липка (клейка)» (sticky) або «анти-липка» (anti-sticky) [1].…”

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Cost Behavior Analysis: A Modeling Approach

Yakymova¹,

Sidletska²

2019

Efektyvna Ekonomika

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У статті обґрунтовано методичний підхід до аналізу поведінки витрат виробництва на підставі регресійних моделей витрат і динаміки витрат, а також коефіцієнта реагування витрат на зміни обсягів виробництва. Алгоритм аналізу передбачає ідентифікацію еластичності витрат, типів витрат та їхньої поведінки у залежності від співвідношення темпів зростання витрат і обсягів виробництва, а також стосовно симетричності поведінки витрат щодо зміни обсягів виробленої продукції. Емпіричні результати дослідження за даними по хлібопекарних і промислових підприємствах України за 2012-2017 рр. показали, що як у хлібопекарній галузі, так і у промисловості у цілому витрати виробництва нееластичні за обсягом виробництва. Крім того, дослідження встановило симетричність поведінки витрат у хлібопекарній галузі та анти-липкість-у промисловості у цілому, проте ступінь липкості витрат розрізняється у залежності від статей витрат. A traditional cost analysis considers costs as fixed and variable and establishes that variable costs automatically change symmetrically with changes in business activity. However, numerous recent empirical studies have documented an asymmetric cost response to increase or decrease activity. As a rule, empirical studies of cost behavior analysis use cost regression models, but among Ukrainian scientific studies, cost behavior analysis using econometric models is not sufficiently considered. This paper substantiates the methodical approach to the cost behavior analysis that based on the cost regression models, as well as the cost response rate to changes in activity. The analysis algorithm provides for identification of cost elasticity, types of costs, and cost behavior depending on the ratio of costs' growth rate and production growth rate, and on the symmetry of cost behavior relative to changes in sales volumes. The study investigates and compares the cost behavior in bakeries and industrial enterprises during the period 2012-2017. To estimate the parameters of the models and verify its performance, the data were collected from State Statistics Service of Ukraine. Empirical results have shown that both in the baking industry and in the industry as a whole, production costs are inelastic in terms of production. Based on the results of the assessment, in 2013-2015, at bakeries, the costs are degressive, they grow more slowly than production volumes, in 2016-2017, costs are progressive. In industry, cost behavior is not sustainable. In addition, the study found that cost behavior in the baking industry was symmetrical on average, but in the industry, costs are anti-sticky on average. This means that in industry, with an increase in sales, on average, costs increase less than they decrease with a decrease in sales, and this can be associated with pessimistic expectations. Our empirical results have also confirmed the hypothesis that the degree of cost stickiness differs with different cost accounts. The proposed methodological approach to the cost behavior analysis and its results will be useful both at the macro le...

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The Asymmetrical Behavior of Cost: Evidence from Jordan

Cited by 26 publications

References 36 publications

Perception of cost behaviour in industrial firms with emphasis on logistics and its costs

Perception of cost behaviour in industrial firms with emphasis on logistics and its costs

Cost Stickiness: Behavior and Factors

Cost Behavior Analysis: A Modeling Approach

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