Digest Finance
 

The Use of Econometric Tools for Cost Management Analysis

Vol. 24, Iss. 1, MARCH 2019

PDF  Article PDF Version

Received: 18 September 2018

Received in revised form: 2 October 2018

Accepted: 16 October 2018

Available online: 29 March 2019

Subject Heading: RISK, ANALYSIS AND EVALUATION

JEL Classification: С10, C80, D20, L22, M40

Pages: 21-33

https://doi.org/10.24891/df.24.1.21

Pakhomov A.V. AO Scientific and Production Complex Dedal (Rosatom State Atomic Energy Corporation), Dubna, Moscow Oblast, Russian Federation
pakhomov_av@dedal.ru

ORCID id: not available

Pakhomova E.A. Dubna State University, Dubna, Moscow Oblast, Russian Federation
pakhomova.ea@phystech.edu

https://orcid.org/0000-0002-3572-9614

Rozhkova O.V. Dubna State University, Dubna, Moscow Oblast, Russian Federation
olga_r2006@mail.ru

https://orcid.org/0000-0001-8406-3057

Subject The article analyzes the cost management cycle, being a determinant of the economic result embodies in profit and better competitiveness.
Objectives Using econometric tools, we conduct an extended analysis of the cost management process by modifying and implementing components of the financial position specification technique and segregating conditionally fixed and conditionally variable costs from total costs of an entity as an element of its external environment.
Methods We relied upon financial documents of the entity producing consumer goods of limited diversity, framework of multiple regression and the financial position specification technique.
Results Having adjusted the initial technique for the specifics of the analyzable issue, we managed to expand the scope of the tools and proposed what aspects of the model should be developed so to streamline the departure from the traditional classification of economic processes into micro-, meso- and macrolevels. We analyzed the correlation of production output by brand, general fixed costs, variable costs per product unit and performance results through the break-even analysis so to make precise measurements of conditionally fixed and conditionally variable costs. The analysis revealed that the entity's operations will remain breakeven within five years to come. Making the substantive interpretation of causes and consequences of the proposed transformations and values, we take the specifics of each item into consideration, adjust tools and make assumptions for further specification in accordance with a life cycle stage, external environment, regional and macroeconomic trends, etc.
Conclusions and Relevance As the computations show, costs can be segregated, with modern information and computing tools being able to ensure not only an operational and practicable algorithm, but also the sufficient quality of analytical finding, which would allow to make and implement further managerial decisions.

Keywords: performance management, conditional fixed costs, conditional variable costs, multiple regression, dynamic model, spiral model

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