Comparative analysis of sticky SGA costs and cost of goods sold: Evidence from Tehran Stock Exchange

Article history: Received October 28, 2013 Received in revised format 20 November 2013 Accepted 12 January 2014 Available online January 15 2014 One of the primary assumptions in accounting industries is to expect an increase (decrease) in cost of production is proportion to increase (decrease) in sales revenue. However, there are some evidences that the cost of production does not decrease with the same trend as revenue decreases. This phenomenon is called sticky behavior since the cost of production in not reduced as the sales decreases especially in operating as well as administration department. In this paper, we present an empirical investigation to study sticky behavior on 70 selected firms from Tehran Stock Exchange over the period 2002-2011. The results indicate that sales and general administration cost (SGA) as well as the costs of sold goods strongly have sticky behaviors. © 2014 Growing Science Ltd. All rights reserved.