Cost Behavior of Decline-Stage firms with High R&D Intensity

2021 ◽  
Vol 12 (3) ◽  
pp. 397-415
Author(s):  
Sang-Hoon Oh ◽  
Sung-Wook Yi
Keyword(s):  
Cost Behavior

The Effect of Strategy on the Asymmetric Cost Behavior of SG&A Expenses

2020 ◽  
Author(s):  
Apostolos A. Ballas ◽  
Vassilios-Christos Naoum ◽  
Orestes Vlismas
Keyword(s):  
Cost Behavior ◽  
Asymmetric Cost ◽  
Asymmetric Cost Behavior

Logistics Costs Behavior and Management in the Auto Industry

2015 ◽  
Vol 31 (4) ◽  
pp. 389-408 ◽  
Author(s):  
Marcela M. Porporato
Keyword(s):  
Real Life ◽  
Systems Design ◽  
Management Control ◽  
Data Availability ◽  
Manufacturing Companies ◽  
Bottom Line ◽  
Related Data ◽  
Profitability Analysis ◽  
Confidentiality Agreement ◽  
Cost Behavior

ABSTRACT This case, based on a real-life situation of how logistics costs function in daily operations, aims to provide students with the opportunity to understand how logistics costs are calculated and how the inter-organizational nature of these costs affects the profitability of two companies. The case hinges on understanding cost behavior (fixed and variable) and on management control systems design. Although logistics costs represent a small fraction of total costs in manufacturing companies, they can negatively affect the bottom line if left unattended. Students are presented with data relating to a three-year project in the automotive industry that shows that the project has been experiencing a sustained increase in costs that has eroded its profit margin. While it appears that logistics costs are the problem, it cannot be verified until the contracts are studied. In addition, the financial- and contract-related data provided are sufficient to extend the profitability analysis to the provider of logistics services. This case is suitable for management accounting courses at the master's or advanced undergraduate level; it has been tested and well received by students who want to gain a greater understanding of logistics costs—their nature, behavior, possible containment strategies, and inter-organizational effects. Data Availability: Some of the data are from public sources, but the logistics contracts and cost schedules are private; the confidentiality agreement with the two companies requires masking certain details and modifying the numeric data.

Real Earnings Smoothing and Asymmetric Cost Behavior

2021 ◽  
Author(s):  
Nikolaos I. Karampinis ◽  
Giannis D. Lessis ◽  
Dimitrios Ntounis ◽  
Orestes Vlismas
Keyword(s):  
Earnings Smoothing ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Asymmetric Cost Behavior

scholarly journals Sticky cost behavior: evidence from Egypt

2017 ◽  
Vol 7 (1) ◽  
pp. 16-34 ◽  
Author(s):  
Awad Elsayed Awad Ibrahim ◽  
Amr Nazieh Ezat
Keyword(s):  
Corporate Governance ◽  
Information Needs ◽  
Academic Research ◽  
Content Type ◽  
Listed Firms ◽  
Corporate Governance Code ◽  
Cost Behavior ◽  
Asymmetric Cost ◽  
Cost Stickiness ◽  
Asymmetric Cost Behavior

Purpose The purpose of this paper is to provide further empirical evidence on the asymmetric cost behavior, cost stickiness, in an emerging country, Egypt, which lacks academic research on this subject. Design/methodology/approach This study uses multiple regression analysis to analyze the behavior of selling, general, and administrative costs (SG&A) and cost of goods sold (CGS) individually and jointly using total costs (TC) for the period 2004-2011 for Egyptian-listed firms. In addition, the study compares the cost behavior three years prior to and after the application of the corporate governance code in Egypt in 2007. Findings The results indicate that asymmetric cost behavior is common among Egyptian-listed firms as their SG&A, CGS, and TC were found to be sticky during the study period. The application of the corporate governance code in Egypt was found to affect the nature of SG&A – the behavior of these costs changed from sticky before the code to anti-sticky after the application of the code. Moreover, the code was found to affect the magnitude of stickiness of both CGS and TC. Originality/value Greater awareness about cost behavior is important for emerging markets such as Egypt in order to protect investors’ interests and satisfy their information needs. To the best of our knowledge, this study is the first to provide evidence on cost stickiness in Egypt. Moreover, this study provides further evidence on the correlation between corporate governance and asymmetric cost behavior.

Unraveling the Black Box of Cost Behavior: An Empirical Investigation of Risk Drivers, Managerial Resource Procurement, and Cost Elasticity

2015 ◽  
Vol 90 (6) ◽  
pp. 2305-2335 ◽  
Author(s):  
Martin Holzhacker ◽  
Ranjani Krishnan ◽  
Matthias D. Mahlendorf
Keyword(s):  
Financial Risk ◽  
Demand Uncertainty ◽  
Empirical Investigation ◽  
Health Planning ◽  
Data Availability ◽  
Cost Elasticity ◽  
Cost Structures ◽  
Cost Behavior ◽  
Prior Literature ◽  
Contract Labor

ABSTRACT This paper extends prior literature on cost behavior by providing insights into how firms achieve changes to cost structure in response to two important risk drivers, i.e., demand uncertainty and financial risk. Using theory from labor economics, supply-chain management, and finance, we posit that demand uncertainty and financial risk influence cost management activities. Specifically, we argue that firms are likely to alter resource procurement choices to increase cost elasticity in response to these two risk drivers. We use data from California hospitals that allow for the calibration of three distinct resource procurement choices that increase cost elasticity: outsourcing, leasing of equipment, and hiring contract labor. Mediation analysis using 2,202 hospital year observations indicates that both demand uncertainty and financial risk influence cost elasticity. Importantly, these effects are mediated by the three aforementioned resource procurement choices. Overall, our findings support the view that firms make procurement choices to manage the risk associated with cost structures. Data Availability: Data used in this study are publicly available from the Office of Statewide Health Planning and Development (see: http://www.oshpd.ca.gov/). JEL Classifications: I18; M41.

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