Analyzing cost behavior of Philippine industrial firms

College

Ramon V. Del Rosario College of Business

Department/Unit

Accountancy

Document Type

Article

Source Title

Academy of Accounting and Financial Studies Journal

Volume

20

Issue

1

First Page

103

Last Page

113

Publication Date

1-1-2016

Abstract

Recent studies find that cost behave asymmetrically with changes in activity levels which challenges the traditional view that cost behaves either symmetrically with volume (variable) or remains the same (fixed). Philippine industrial firms exhibit this cost behavior using discretionary costs such as sales, general and administrative expenses (SGA). However, the question remains whether they exhibit the same behavior for other types of costs such as cost of goods sold, investment costs and total operating costs. This study shows that Philippine industrial firms adjust their cost structures whether it be their cost of goods sold, investment costs or total operating costs with changes in demand conditions using the empirical model of ABJ (2003).

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Disciplines

Accounting

Keywords

Costs, Industrial--Philippines

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