Analysis Of Selling, General And Administrative Cost Stickiness On Net Sales At Different Economic Condition
(Empirical Study Of Manufacturing Company Listed In The Indonesia Stock Exchange)
Astri Novianti & Primanita Setyono
A traditional theory of cost behavior is that cost responses mechanically to activity volume. Mechanical means that cost adjust without management intervention. The purpose of this research is to investigate whether cost is “sticky” in different economic condition. The cost is sticky if whether cost increases more when volume rises than they decrease when volume is fallen by an equivalent amount. 69 manufacturing firms listed in the Jakarta Stock Exchange from 1993 to 2004 (divided into three period) were taken as sample using purposive sampling method. The statistical method used to test hypotheses is panel data log linear regression. The result of this study shows that: 1) cost stickiness is not found before and after economic crisis period, but it is found in during economic crisis period. 2)The degree of stickiness increases with employee intensity in each period with the highest stickiness before economic crisis. 3)The degree of stickiness increases with asset intensity before economic crisis period. While, during and after economic crisis, the degree of stickiness decrease with the increase asset intensity.
Keywords: Cost Behavior, Economic Crisis, Selling, General and Administrative Cost, Employee Intensity, Asset Intensity
According to Cashin & Polimeni (1998, p.19), cost is defined as the benefits given up to acquire goods or services. It means that cost is spent out by company in order to this company gets benefits in the future. Related to volume, there are three kinds of cost varied with changes in the volume of production; fixed cost, variable cost, and semi-variable cost. Three of these costs have different behavior depending on the change of input or output. In traditional theory of cost behavior, cost is divided into fixed and variable cost in which cost responses mechanically to activity volume. Mechanical means that cost adjust without management intervention (based on production schedule). However, there are many arguments regard to this characterization of cost behavior which is inconsistent with the way that managers manage cost (Cooper & Kaplan, 1998 cited in Anderson & Lanen, 2007), such as the action of managers in deliberately adjusting resources as response to changes in volume. This matter effects on costs which increase more when volume rises than they decrease when volume is fallen by an equivalent amount. It is called as sticky cost. From the definition, it is shown that sticky cost is an asymmetric reaction to activity change.
Jurnal Simposium Nasional Akuntasi XI (SNA 11)