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a Dr Zhang Jianguo
b Dr Bradley Obred
c Dr Kelly McJames
AN EXPERT OPINION :
the relationship between perspective managers and "sticky costs" in the stock exchange
ABSTRACT
Recent research conducted on the behavior of costs shows that costs do not change in proportion to changes in sales. To describe it we can say, costs will increase in proportion to the sales increase, but will not decrease in proportion to the decrease in sales, this disproportionate costs, called sticky cost. There are two theories concerning the causes of sticky costs: One suggests that costs become sticky as a result of the deliberate decision of managers (hereafter referred to as the deliberate decision theory). Other theory points out those costs may become sticky as a result of costs decline being unable to keep up with sales declines (hereafter referred to as the cost adjustment delay theory). Up to now comment of conscious decision and management's expectations from sales in the future has not been tested directly. Therefore in this research, comment of conscious decisions using predict management from sales in the future has been tested. The results of this opinion are based on firms listed in Stock Exchange for the 5-year period from 2005 to 2010: the results shows, when managers are optimistic about future sales the stickiness of cost increased.
Keywords: sticky costs, cost behavior, conscious decision
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