search query: @indexterm MODEL TESTING / total: 65
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| Author: | Anderson, M. C. Banker, R. D. Janakiraman, S. N. |
| Title: | Are Selling, General, and Administrative Costs "Sticky"? |
| Journal: | Journal of Accounting Research
2003 : MAR, VOL. 41:1, p. 47-64 |
| Index terms: | ACCOUNTING COSTS SALES MODEL TESTING |
| Language: | eng |
| Abstract: | A fundamental assumption in cost accounting is that the relation between costs and volume is symmetric for volume increases and decreases. In this study, the authors investigate whether costs are "sticky"- that is, whether costs increase more when activity rises than they decrease when activity falls by an equivalent amount. The authors find, for 7,629 firms over 20 years, that selling, general, and administrative (SG&A) costs increase on average 0.55% per 1% increase in sales but decrease only 0.35% per 1 % decrease in sales. The authors' analysis compares the traditional model of cost behavior in which costs move proportionately with changes in activity with an alternative model in which sticky costs occur because managers deliberately adjust the resources committed to activities. |
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