Understanding cost behavior is a fundamental element of cost
accounting and the management of a firm. Deviating from the
traditional assumption of symmetric cost behavior, numerous recent
research studies show that costs are sticky, that is, they decrease
less when sales fall than they increase when sales rise. Daniel
Baumgarten comprehensively analyzes the cost stickiness phenomenon
by discussing its development and all relevant findings presented
in the research literature. Furthermore, he provides several
suggestions for future research and discusses important
implications of cost stickiness for fundamental analysis and
analysts' forecasts by means of two comprehensive empirical
analyses.
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