Cost Management Research

64 Pages Posted: 10 Dec 2016 Last revised: 26 Oct 2017

See all articles by Rajiv D. Banker

Rajiv D. Banker

Temple University - Department of Accounting

Dmitri Byzalov

Temple University - Fox School of Business and Management - Department of Accounting

Shunlan Fang

Kent State University

Yi Liang

Temple University - Department of Accounting

Date Written: October 25, 2017

Abstract

The traditional view of cost behavior assumes a simple mechanistic relation between cost drivers and costs. In contrast, contemporary cost management research recognizes that costs are caused by managers’ operating decisions subject to various constraints, incentives, and psychological biases. This conceptual innovation opens up the “black box” of cost behavior and gives researchers a powerful new way to use observed cost behavior as a lens to study the determinants and the consequences of managers’ operating decisions. In 2014, Banker and Byzalov presented an overview of the economic theory of cost behavior and major estimation issues. The research literature on cost management has grown rapidly in the past few years and enhanced the understanding of how managerial decisions influence observed costs. In this study, we provide a comprehensive review of recent findings and insights, with a particular emphasis on the implications of cost management for understanding issues in cost, managerial, and financial accounting, and challenges and opportunities for future research.

Keywords: managerial decisions; resource adjustment costs; asymmetric cost behavior; cost stickiness; optimistic and pessimistic expectations

Suggested Citation

Banker, Rajiv D. and Byzalov, Dmitri and Fang, Shunlan and Liang, Yi, Cost Management Research (October 25, 2017). Journal of Management Accounting Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2882713 or http://dx.doi.org/10.2139/ssrn.2882713

Rajiv D. Banker

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States

Dmitri Byzalov (Contact Author)

Temple University - Fox School of Business and Management - Department of Accounting ( email )

Philadelphia, PA 19122
United States

HOME PAGE: http://astro.temple.edu/~dbyzalov/

Shunlan Fang

Kent State University ( email )

Kent, OH 44242
United States

Yi Liang

Temple University - Department of Accounting ( email )

Philadelphia, PA 19122
United States

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