Applied mathematics in Engineering, Management and Technology 2 (4) 2014:

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1 Applied mathematics in Engineering, Management and Technology 2 (4) 214: Review and analyzing the factors affecting the stickiness behavior of general administration costs and sales of listed companies in Tehran Stock Exchange Masoud Jalilian, Ebrahim Vahidi Elyssai Ph.D Department of Agricultural Management, College of Agriculture, Ahvaz Branch, Islamic Azad Universy, ahvaz, Iran Abstract Recent research on the costs behavior shows that costs do not change according to changes in sales. In other words, the cost increases according to the increase in sales, but does not reduce according to the decrease in sales. This disproportionate behavior called cost stickiness. So, the main purpose of this study is to analyze the factors affecting the stickiness behavior of public-administrative costs and sales of listed companies in Tehran Stock Exchange. The results of the study were obtained for a 6 years period from the beginning of 27 until the end of 212 wh the combined data method (pooling), and by using data from 14 companies listed on the exchange and has indicated that for every 1% increase in sales level, administrative general costs, and sales increased to 66%, while for every 1% decrease in selling costs, general, and administrative sales decreased to 34%. Also, in this study, the change in the severy of stickiness costs in different time periods were reviewed. The results indicate that the severy of stickiness costs in the period in which the revenue reduction occurred before is smaller. Also, the severy of stickiness costs for companies that have high debt ratio and the sum of the fixed assets is higher. Keywords: Administrative, general and selling costs, stickiness costs behavior, severy of stickiness costs. 1-Introduction Management accounting information for future decision was provided by managers of the management accounting department; hence management accounting should be known as an influential process of management decision making. The success of any organization in achieving s goals will greatly depend on the performance of s duties. Today organizations operate in a dynamic and changing environment; hence the continuy of the activy should have great flexibily and be prepared to respond effectively to environmental changes compared at the same time. Management accounting, as a management information system, plays an important role in this regard. An information system can help organizations to produce products or provide services at lower cost which help to provide high qualy and timeliness (Mireskandari, 26). According to the discussed lerature in industrial accounting and management accounting, symmetric costs behavior respect to changes in activy level indicate that according to recent researches this lerature has changed and paid more attention to cost behavior. In late 196s and early 197s, Solomon and Estaboos noted to the relationship between activies and costs for the first time. But, academic and professional circles became more attractive about this issue in the early 198s, and based on the common accepted lerature, costs based on changes relative to the level of activies divided in to two types of variables, fixed and direct variables. Based on the theory of variable costs in proportion to the cost-driven changes, cost that is the activy level is changed. Until Anderson and colleagues (23) argued the hypothesis of the sticky behavior of costs and new lerature on costs behavior unfolded. This lerature argues that greatly reduces in costs according to the effect of activy volume, are less sharply increased costs due to increased volume of activy and this type of behavior is called the costs stickiness behavior. According to the importance of costs behavior investigation in order to companies future planning, in this study, we sought to answer these important question, how different characteristics such as firm size, assets and liabilies of the company effects on the cost stickiness. The results of this study are especially useful for managers and financial analysts. Because managers and researchers to identify and accurately predict and how the cost reaction to income fluctuations, design the regular planning and relying and making informed 584

2 decisions. Also, these results are very helpful in understanding the behavior of costs and important step for a better analysis of costs and more attention to the causes and consequences and the influencing factors on the costs stickiness will be a helping for managers to develop better companies future plans and budgeting. Different theories have been proposed about the severy of costs stickiness such as managers tend to retain the resources capacy in terms of revenues reduction due to a lack of willingness to bear the costs of resource adjustment and re-equip the sources. Anderson (23) and a group of researchers such as Chen (28) and Mediros (24) analyzed such a phenomenon from the perspective of representation theory and managers individual motivations in maintaining the production capacy in periods of income reduction. ers such as Anderson and bunker (27) and Chen (28) to investigate the importance of sticky behavior of costs in the upcoming performance evaluation and the rate of return on investments analysis, introduced new and compare to their wh the previous tradional s showed that the s have more accuracy in predicting the rate of return on their investments. Anderson and bunker (27) showed, in contrast to the tradional view, increasing distribution costs, selling, general and administrative proportion to the net sales is not a bad news about the company's current and future performance. They found that this view is correct only in terms of income increasing and in view of the reduction of selling; should be assessed wh caution. Costs behavior study not only for academic researchers but also for all those who work directly wh business activies related to their profession are important. There are several points of view in cost accounting lerature about the behavior, Garrison and Noorin (21) and Horn Gran and colleagues (28) reported that regardless of the direction of change (increase or decrease) costs react to changes in activy levels. While Noorin and Soderstrom (1997) and Anderson et al (23) argue that costs increase in the period of increased activy level, are more than the cost reduction in the level of activy and therefore the costs reduction cause to stickiness of the costs. In the tradional of cost behavior that is usually accepted in the accounting lerature, costs regarding to changes in the level of activy can be considered as fixed and variable. In this, the variable costs in proportion to changes in stimulus activy are swinging (Balkrishan and others, 28). The assumption is that the difference size in cost only depends on the change in activy level and not to the direction of change. In order to investigate cost stickiness can, as an example administrative cost behavior, general and selling wh respect to changes in the level of sales significantly test and investigate, because the level of selling is the motivation of many components of administrative, general and sales costs (Cooper and Kaplan, 1998). Therefore, according to the importance of administrative, general and selling costs in the corporate structure, in this study investigate how the behavior of these costs wh respect to changes in the level of sales and stickiness of these costs are considered. Indubable, aware of the results of this research in more accurate assessment of financial performance, profabily prediction and more accurate management decisions is important. Furthermore, since this study is among the earlier researches about the cost stickiness in Iran, also promotes the study and discussion of the costs of strategic management accounting in Iran. 2- Background of the research: Weiss (21) in another study evaluate the effects of asymmetric cost behavior on prediction of benef payments analysts. And the results indicated that companies have more cost stickiness, the accuracy of prof predictions by analysts are less, and cost stickiness affect on the covering priory of analysts and investors in evaluating the Company's value consider the costs stickiness. Canoon (211) in another study investigates the determinant factors of the cost stickiness in American aviation companies. The results showed that if the final cost of increasing capacy when demand increases, are more than reducing capacy when demand is greater than the marginal benef, stickiness costs were increased and since the price product reduction when reducing demand, are more than the increase in cost when demand increases, the price of costs stickiness reduces in reducing demand. In other research Chu, Lu and Su-Guinness (212) investigate the corporate governance and firm problems and stickiness behavior of administrative and general and selling cost. According to results of the research representative administrative, general and selling costs are a significant portion of the business so that the ratio of general and administrative and selling costs to total assets is 27% in an average while the ratio of & Development cost is 3 percent. Nicola and Paolo (213) in a study consider the behavior of costs wh respect to large and small companies in the Italian Stock Exchange during the period of 1999 to 28. results showed that only wage labor 585

3 costs are sticky and evidence of the stickiness of operating costs, general and administrative and selling cost and sold goods were not observed. Namazi and Davani Pour (21) in an article entled Experimental Studies of stickiness behavior of costs in the Tehran Stock Exchange, for a 1-year period from 1998 to 27 for 5 companies operating in the stock and different industries, study the cost stickiness in Tehran Stock Exchange. Also, the results showed that severy of cost stickiness in the period cost reduction occurred before is less and stickiness severy for companies that have more total assert compare to the selling are more. Haji &Timurid (212) investigate the relationship between the cost behavior and profs prediction in companies listed in Tehran Stock Exchange. The results of their study by using data from 79 companies during 27 to 21 were showed that accuracy of prof prediction has a direct relationship to the cost stickiness. In other words, as the prediction accuracy is higher, the cost stickiness will be more. Also, there is a direct relationship between accuracy of prof prediction and prime cost of the sold goods. Therefore, how much the accuracy of prediction is higher, the increase in costs wh increased volume of activy have more increased than the reduction of the level of activy. Kurdestani and Mortazavi (213) in a study evaluated the effects of decisions made by managers on the costs stickiness in Tehran Stock Exchange. The results showed that the expected increase in future sales by management, cause to reduced cost stickiness of prime sales and how the optimism is greater; reduction of prime cost stickiness is greater. But management optimism was increased, sales, general and administrative cost stickiness and stickiness of these costs in management high optimism, are more than a ltle optimism that is strong evidence for confirmation of the hypothesis of wise decisions about selling, general and administrative cost. 3- hypotheses According to theoretical bases of the research, the following hypotheses are proposed: First hypothesis: general, administrative and sale cost have stickiness than the changes in sales revenue. Second hypothesis: the severy of stickiness administrative, selling and general cost during periods that reduction occurred in previous period is lower. Third hypothesis: there is a relationship between GDP growth rate and severy of general, administrative and selling cost stickiness. Fourth hypothesis: there is a relationship between the assets of company and general, administrative and sales stickiness. Fifth hypothesis: there is a relationship between the debt levels of company wh general, administrative and sales stickiness. 4-Materials and Methods Method of research in terms of implementation is descriptive and correlation. Its descriptive because the purpose is describes a suation or considering phenomenon and to understand the present suation and the correlation between the variables in this study and because the purpose of this research is applied. Because study the relationship between variables in order to test the research hypotheses securies covered lawn econometric software Eviews 7 has been used. 4.1 The statistical population of the study Population includes all firms listed in Tehran Stock Exchange; following creria consider selecting the sample and hence were selected by systematic removing sampling methods. Mentioned condions are: 1- They have been members of the Tehran Stock Exchange minimally before Corporate financial periods ending on 29 March of each year. 3-Sharehold of companies shall be traded at the beginning and end of their fiscal year. 4- The financial statements for the end of fiscal year had been delivered to stock. 5- There is not among the investing and financing companies. 586

4 After applying these restrictions, 14 companies have all the condions of the statistical population. Required data to carry out research were collected in the database such as Rah-avard-e-novin and tadbir pardaz software, related webses, and DVD released by the Securies and Exchange data. 5- Measurement approaches of research variables 5.1 The dependent variable: logarhm of the rate of general, administrative and selling cost growth Since the aim of study is cost behavior in response to changes in sales, sales growth logarhm was considered as one of the descriptive variables in the s. To measure changes in the cost of sales, dummy variable in the s used that if sale reduction accrued in previous year, the value of 1, and otherwise the value is zero. Growth rate Logarhm of general administrative and selling cost (SGA) directly can be derived from the prof and loss statement. SGA LOG SGA 1 (SGA): The logarhm of the growth rate of general and administrative and selling cost SGAt: administrative, general and sales costs of i firm in year t SGAt-1: administrative, general and sales costs of i firm in year t Independent variables: Logarhm of incoming rate sale (SALE) Net sales of the company were during the year which directly is extracted from the prof and loss statement. sale log sale 1 sale t : Net sales of i firm in year t, sale t-1 : Net sales of i firm in year t-1 Dummy variable of sales growth rate sale D*log sale 1 Dummy variable D, if sale increase (sale T ) in year t relative to sales (sale t-1 ) year t-1 equals and otherwise s value is one. Gross domestic product growth ((GDP): The company's fixed assets are during the year, which is directly extracted from the balance sheet. If is increased compare to the previous year equals to 1, and otherwise received zero. Logarhm of assets ((ASSET):.Asset log sale The company's fixed assets are during the year, which is directly extracted from the balance sheet..asset t : Fix assets of i firm in year t,.asset t-1 : Fixed assets of i firm in year t -1 The debt logarhm (DEBT): the amount of company debt during the year which is directly extracted from the balance sheet. Debt t : The total debt of i firm in year t, and Debt t-1 : total debt of i firm in year t-1. Debt log sale 587

5 6- Test method of research hypotheses Using the following was presented by Anderson and colleagues (23) and other researchers have used (Balakrishnan, 24, Kalja et al, 26, Sabramanyam, 23) can be compared the how behavior of the costs to changes in terms of increased sales and decreased income assessed separately. The first assumption of the : General, administrative and selling stickiness costs SGA t : administrative, general and sales costs of i firm in year t SGA t-1 : administrative, general and sales costs of i firm in year t -1 Sale t : Net sales of i firm in year t Sale t-1 : Net sales of i firm in year t-1 Dummy variable if sale increased (salet) in year t relative to sales (sale t-1 ) year t -1 equals to zero and otherwise s value is one. Since the study population, included different companies in different industries and in different sizes, so, using the based on proportional and logarhmic indices causes to increase the abily to compare data among companies and became same the interpretation of the estimated s. Because the value of the variable D at the selling time is zero, the β1 percent sales increase in general, administrative and selling cost and shows a result of a 1% increase in sales. Also, since the D decreases in the selling time, is equal to 1; therefore the sum of the s β1 + β2 represents the reduction percent in general, administrative and selling costs and lead to 1% decrease in sales. If general, administrative and selling costs are sticky, increase percentage in costs in terms of increased sales must be more than costs reduction in terms of loss of sales. In other words must be, Β1> and β2 <. The second hypothesis : stickiness severy of administrative, general and sales in the period that the revenue reduction occurred in the previous period is less. SD: If the prior periods' of income reduction, revenue decline occurred, the amount of which is equal to 1, and otherwise the value is zero. In this, the β1 show increase percent in general, administrative and selling cost, thus 1% increase in sales revenue and β1 + β2 + β3 represents the percent reduction in general, administrative and selling costs and thus s 1% decrease in sales revenue. Coefficient β2 be negative show the cost stickiness and a posive cost factor β3 (p-value =.) showed a reduction in the severy of stickiness in the periods that reduction occurred in previous period. Third hypothesis: GDP growth rate related to the stickiness severy of general, administrative and selling costs. Dummy variable D, if increased sale (sale T ) in year t relative to sales (sale t-1 ) year t -1 equals to zero and otherwise s value is one. The fourth hypothesis : the amount of assets and severy of general and administrative cost stickiness The fifth hypothesis : the amount of debt and severy of general and administrative cost stickiness 7- The results of research hypotheses test 7-1-Reasearch descriptive statistics 588

6 Descriptive statistics is always be used to identify and describe the characteristics of the survey information. Thus, the descriptive statistics of the variables used in this study are listed in Table No. (2). Following amounts only provide a general overview of the research data distribution. Table 1: Descriptive statistics of survey results General, sell administrative and Debt Asset selling Mean Median Maximum Minimum Standard deviation skewness Observation 84 Source: author calculations As shown in Table 2 the average sales of examined company during the test equals to 163,357 Rials and the average cost of general administration and selling is 55,192 Rials. The Median of general and administrative cost variable and sale is 14,899 Rials which data show that half of data is less than this amount and other half are greater than this. Among the research variables, general administrative and selling cost and assets variables are the least and greatest amount of distribution. The asymmetry of the frequency curve is called skew. If the of skewness is zero, the perfectly symmetrical and if the is posive, skewness to the right and if is negative skewness is left. Debt variable has less asymmetry and assert has more asymmetry variable relative to the normal distribution The correlation test As can be observed in the table, the correlation between research variables, indicate no significant correlation between these variables. Table 2: Results of Pearson correlation s between variables Probabily SALE SGA DEBT ASSETS SALE 1 p.v SGA.75 1 p.v DEBT p.v ASSETS p.v Un root test Un root test using the Levin methods test, Lin and Chu (22) Fisher un root test Dickey Fuller and, Fisher un root test and Philips Peru (21) was used. Test results of variable reliabily show that prob of total variables are less than 5% percent and research variables are stable. 589

7 Table 3: Un Root Test for Variables Variable and Leen Levin Adjusted Fuler chuw Fisher Dicki Peru/Philips Fisher Statistic v. p Statistic p.v Statistic p.v Logsale logsga Logasset Logdebt Hypnosis's analysis by using the combined data The first hypothesis test First hypothesis: public, administrative and sales costs compare to selling incoming changes has stickiness. Chaw test Table 4: Results of condional F test (Chow) and Hausman The results of condional F and Hausman show that require method to estimate the sign of the first hypothesis is panel method (p.v less than 5%). Also, Since the Hausman test probabily in the research is less than 5% of the selected type will be "fixed effects". The results of combined data of the first hypothesis have been shown in table (7) as follows: Table 5: Results of the first research hypotheses on the combined data level F- Description Coefficient Statistic static Durbinp.v t P- Watson value Fixed statistic F β β β β 1+ β2.34 Determination.42 Adjusted determination R 2.4 According to the likelihood statistic (F), significance level of is less than 1% therefore can be concluded that the regression equation significant at the 99% of the confidence level. Adjusted of determination indicates the relevance of the as independent variables and the dependent variables. According to Table (7), the determination of adjusted was 4%. Thus, on average, 4% of the variabily is determined by the independent and controls variables. Also, the amount of Durbin-Watson statistic test result from is 1.5 to 2.5, which implies the lack of autocorrelation among the values of s error. 59 df p-v Test result Type of test equal levels of Intercept First H rejected Hausman test There is relationship between independent variables and regression estimation error 1.99 Panel data Chi.sq Df p.v Test result Type of test First H rejected Fix affects

8 According to above Table (7), the s β1 and β2 are statistically significant at the 5% level. Regard to the estimated s β1, which is equal to 66% can be expressed as a 1% increase in general, administrative and sales costs, increased to 66%. Also, the β2 equals to -32%. Coefficient β2 be negative and significant represents the stickiness behavior of administrative, general and selling costs. Since 1β> 2β + 1β and this means that a 1% decrease in sales, general, administrative and selling cost decrease to 34% (32% -66%) and thus the first research hypothesis will be accepted. findings related to Anderson research results (23), Sabramanin and Runnymede Meyer (23), Kalyja (26), Mediros (24), Qaemi and nematollahi (26), nnamazi and Davani pour (21), Namazi and colleagues (212) correspond to adhere to these costs The second hypothesis of the test Second hypothesis: the severy of stickiness general administrative and selling cost that during the previous period decrease in income occurred is lower. Table 6: Results of condional F test (Chow) Chaw test equal levels of Intercept Second statistic F df p-v Test result Type of test H no rejected Pooling data The results of the combined data of the second hypothesis in table (9) are stated as follows: Table 7: the test results of the second study hypothesis on the combined data F- General, administrative and selling cost static P- value Durbin- Watson Descriptive Coefficient Statistic t p.v β β β β β3+β1+β2.41 Determination.69 R 2 Adjusted According to above table 9, the negative of stickiness β2 shows the general, administrative and selling costs, (-.55 ) and a posive β3 indicates a decrease of stickiness in the periods that the revenue decline occurred in the previous period (.19). Posive values of the β3 represent adverse effect of sd variable on stickiness severy of costs and reduction of stickiness severy in the period in which the value of sd is equal to 1. In other words, a posive β3 indicates a reduction of general, administrative and sales costs stickiness in the period in which the decline occurred in previous period and indicates the second hypothesis of the research is accepted. In general, if the prior periods' of income reduction, revenue reduction has been occurred, wh an increase of one percent of income, general, administrative and sales costs increased to.77 and when reduction of cost occurred, these cost only decrease about :

9 In general, if in the period before the prior periods' income, revenue reduction occurred wh an increase of one percent of income, general, administrative and sales costs increased to 77% and while the cost of sales decreased to only 41% and are sticky. These assumptions were confirmed in at 95%. The results of research findings related to Anderson study (23), Sabramanin and Runnymede Meyer (23), Kalyja (26), Mdyrvs (24), Qaemi and Nemat ollahi (26), namazi and Davani Poor (21), Namazi and colleagues (212) and Alimoradi and Ahmadi (213) correspond to stickiness of these costs The third hypothesis test Third hypothesis: GDP growth rate related to the severy of general, administrative and selling costs stickiness. Table8: The results of condional F-test Chaw test equal levels of Intercept Third statistic F df p-v Test result Type of test H no rejected Pooling data The results of combined data of the third hypothesis of the research in table (11) are expressed as follows: Table 9: The results of the third hypothesis test of research on the combined data level F- General, administrative and selling cost static P- value Durbin- Watson Descriptive Coefficient Statistic t p.v β β β β β1+β2+ β3.13 Determination R 2 Adjusted The third hypothesis evaluates the severy of the GDP costs stickiness. The results showed that β1 equals to 53% and suggests that a 1% increase in, general, administrative and selling costs increased to 53%. Also, β2 equal to -25% which be negative of that indicates the sticky behavior of such costs. β3 is -15% which represents the sticky behavior of general administrative and selling cost as a result of the increase in GDP and this means that wh a 1% reduction in, general administrative and selling costs (-53%- 25%-15%= 13% ) 13% reduced and wh the increase of level of GDP, the severy of general, administrative selling cost stickiness became higher and wh a 1% increase in GDP, general, administrative and selling costs stickiness increases to 15% and the third hypothesis will be accepted. The results of findings of the research related to the results of Labroo Balkrishan (211) based on costs stickiness corresponds to these costs The fourth hypothesis test The fourth hypothesis: The amount of company assets related to general, administrative and selling costs severy stickiness. 592

10 Chaw test equal levels of Intercept Hauseman test Applied mathematics in Engineering, Management and Technology 214 Table 1: The results of condional F test (Chow) and Hausman Table 11: The fourth hypothesis test results on the combined data F- General, administrative and selling cost static P- value Durbin- Watson Descriptive Fourth Model Coefficient statistic F Statistic t df p.v Test result Type of test H rejected p.v Panel data Chi.sq df p.v Test result Test result There is relationship between Fourth independent variables and H no rejected Model regression estimation error The results of combined data of the fourth hypotheses in Table (13) are expressed as follows: Random affects β β β β β1+β2+ β3.15 Determination R 2 Adjusted The fourth hypothesis to evaluate the severy of cost stickiness and the amount of company's fixed assets. And as a result, the 95% confidence level, the hypothesis was confirmed. The results show the increase of stickiness of the companies that the ratio of the sum fixed assets is larger than the sum of s net assets (larger companies). The results of the fourth hypothesis indicate that β3 and β2 of s are negative, 's indicating that the increasing effect of logarhm variable of the fix asset over stickiness severy of costs. In other words, for companies that have a high proportion of the total assets and in fact are larger firms, the cost stickiness is larger too. findings related to Anderson (23), Sabramanyn and Runnymede Meyer (23), Kalyja (26), Mdyrvs (24), Qaemi and Nemat ollahi (26), Namazi and Davani Poor (21), Alimoradi and Ahmadi (213) correspond to stickiness of these costs The fifth hypothesis test The fifth hypothesis: The debt levels of company related to the stickiness of general, administrative and selling cost. 593

11 Table 12: The results of condional F test (Chow) and Hausman Chaw test equal levels of Intercept Hauseman test There is relationship between independent variables and regression estimation error statistic F df p.v Test result Type of test Fifth Model H rejected Panel data Chi.sq p.v p.v Test result Test result Fifth Model H not rejected Random affects The results of the condional F and Hausman show that required estimation of fourth method is appropriate to panel data (panel data). Since the probabily of Hausman test in this is more than 5%, the type of the selected will be "random effects ". Table 13: The results of fourth hypothesis test on the combined data level F- General, administrative and selling cost static P- value Durbin- Watson Descriptive Coefficient Statistic t p.v β β β β β1+β2+ β3.2 Determination R 2 Adjusted The fifth hypothesis examines the costs stickiness of and the amount of company debt. The results showed that β1 equals to 69% and suggests that wh a 1% increase in general, administrative and selling costs increased to 69%. Also, β2 equals to -4% which is negative indicates the stickiness behavior of such a costs. Coefficient β3 is negative too, which represents the stickiness behavior of the general administrative and selling costs as a result of the increase in debt and means that a 1% reduction in selling, general and administrative sale costs (69%-4% -27% = 2%) 2% reduced and by increasing the amount of company debt, general, administrative and selling cost stickiness is higher and 1%increased in debt levels, general administrative and selling cost increased to 27%, and the fifth hypothesis is accepted. The results of the research findings related to Anderson (23), Sabramanyn and Runnymede Meyer (23), Kalyja (26), Mdyrvs (24), Qaemi and Nematollahi (26), Namazi and Davani Poor (21), correspond based on the stickiness of the costs. 8-The general conclusions Ultimate goal of any business is maximize the profs and subsequently, the increase in equy. Attempt of any manager of prof un is to gain the maximum benef and efficiency by using the least resources and the easiest way-to reduce consumption of resources and costs controlling. But this requires a thorough understanding of 594

12 how the fees and costs influenced on the behavior factors. Among the cases that must be considered in the analysis of cost behavior, is the cost stickiness phenomenon. Prevailing and public opinion is that the reduction of sales, costs should also be changed accordingly. For example, if sales decline to 5%, the cost will be reduced to 5%, but does not happen in realy. According to informed decision theory, costs under the effect of management decisions became stickiness. In fact, managers expect to prof in the long time, trying to keep their sources to do not deprive of future prof, this matter makes when company sales declines, managers did not reduce costs so much. Empirical evidence of this study shows that there is a stickiness behavior of general, administrative and selling costs in Tehran's stock exchange that corporate to research conducted by Anderson (23) and Medeiros (24). Also the results showed that firms have higher rates of fixed assets and debts, severy of costs stickiness is higher and in other word, there is a significant relationship between the largeness of company and severy of costs stickiness. The results include information about how cost behavior is important which can be obtained by the users, especially accountants, managers, financial analysts and audors to use in order to evaluate and decision making. Finally, according to the results of the investigation, the following suggestions are offered: 1 The results of the research presented the recommendations for managers. Managers can identify and control the company cost stickiness. They can also, through proper contracts for hire operating assets and staff employment (E.g. short-term contracts) reduced the amount of require adjustments to reduce the level of operational assets in periods of demand reduction and decreased the level of sales and the severy of cost stickiness was reduced. 2- Also, audors in the analytical studies accept and applied the assumption of proportional changes compare to the changes in the level of activy. Better understand of how changes in general, administrative and selling cost in relation to changes in sales can help audors to do better analytical study. 3 According to the results of this research, is recommended to investors and shareholders that are more familiar to stickiness costs and have enough attention to in order to make proper decided. When considering the obtaining results, companies that have a high degree of stickiness wh sales reduction, their costs less changed at the time of sales increasing while one of the main reasons for cost sticking to bear the costs of current spending to prevent further losses or obtain more profs in future decisions and depend on the management decisions. Reference Alimoradi, Mohammad and Ahmadi Ali, Saeed. Study the relationship between corporate governance and asymmetric behavior of general administrative, and selling costs of listed companies in Tehran Stock Exchange, Journal of Financial Accounting, Fifth Year,No. 19, pages 162 to 176. Anderson S, Lanen W. Understanding Cost Management: What Can We Learn from the Evidence on Sticky Costs?".Working Paper, Rice Universy, Universy of Michigan 27. Anderson, M. C., Banker, R., &Janakiraman, S. (23). Are selling, general and administrative costs "Sticky"? Journal of Accounting, 41(1): Balakrishnan R, M. J Petersen, N. S. Soderstrom. Does Capacy Utilization Affect the Stickiness of Cost?", Journal of Accounting,Auding and Finance 24; 19(3): Balakrishnan R., Labro E., SoderstromN, Cost Structure and Sticky Costs, Available at SSRN: Balakrishnan, R. &Gruca, T. (28). Cost stickiness and core competency: A note. Contemporary Accounting, Forthcoming, Available at SSRN: Ban ker, R., & Chen, L. (26). Predicting Earnings Using a Model Based on Cost Variabily and Cost Stickiness. The Accounting Review, 81(2), Basu, S., (1997). The Conservatism Principle and the Asymmetric Timeliness of Earnings. Journal of Accounting and Economics,24,pp Bülo, Ghasem., Moazez, Elahe., Khan Hosseini, Davood and Nikunesbati Muhammad "Consider the relationship between management perspectives and costs stickiness in Tehran Stock Exchange". Scientific periodical of Finance and planning, 17th year, No 3. Calleja K, Steliaros M, Thomas D. A Note on Cost Stickiness: Some International Comparisons, Management Accounting 26;17(2):

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