Cost Analysis

Wing Sun Li
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Wing Sun Li: Beijing Normal University–Hong Kong Baptist University

Chapter 2 in Strategic Management Accounting, 2018, pp 13-33 from Springer

Abstract: Abstracts This chapter discusses two fundamental concepts of cost analysis approaches – traditional cost analysis and strategic cost analysis. Cost behavior approach addresses cost structure with respect to output level. It is particularly instrumental in contribution margin analysis. However, it is deficient to deal with complicated competitive market with strategic focus. Strategic cost analysis bridges the gap and sees cost analysis from the competitive advantage of a firm. Cost structure is not an intended choice but a manifestation of strategic choice of cost drivers in gaining competitive advantages in the market position. The chapter ends with an illustration on how to use activity-based costing (ABC) concept to evaluate strategic performance for organizational activity centers.

Keywords: Cost structure; Cost behavior; Strategic cost analysis; Strategic positioning analysis; Activity-based costing to strategic performance analysis (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:spr:mgmchp:978-981-10-5729-8_2

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DOI: 10.1007/978-981-10-5729-8_2

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