Is It Sufficient to Assess Cost Behavior Merely by Volume of Production? Cost behavior research results from Czech Republic

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MONTENEGRIN JOURNAL OF ECONOMICS, ISSN: 1800-5845, Vol: 12, Issue: 3, Page: 139-154

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Novák, Petr; Vencálek, Ondřej
Centre of Sociological Research, NGO; Economic Laboratory Transition Research Podgorica-Elit
cost behavior; overheads; asymmetric cost; cost management; sticky cost; cost driver
article description
This paper presents results from quantitative research performed as part of a project on cost variability and cost management systems. The main goal was to analyze principal findings that arise through seeking to determine levels of cost management, as well as from comprehending various types of cost behavior affecting manufacturing enterprises in the Czech Republic. The first part summarizes contemporary theories on approaches to cost management that place emphasis on overhead cost management and general and asymmetric cost behavior. The second section deals with the procedure and methodology of the research conducted. Moreover, presentation is given of surveyed questions and hypotheses that form the basis for analysis of particular areas within cost management. The subsequent part presents actual results from research verified through statistically inspecting dependence relations. It was found that the share of overheads was still relatively high, although it had decreased in comparison with figures from previous surveys. Furthermore, there was evidence of significant association between the size of a company and the attention paid to a broadened perception of cost behavior and to monitoring the same. In addition, it was confirmed that senior executives were not aware of issues regarding asymmetric cost behavior or the influence of factors beyond production capacity. It was proven that a dependence exists between the prevalent type of production and complications arising in research, e.g. utilization of the ABC method or monitoring semi-fixed and semi-variable costs. These findings are discussed in the final part of the paper.