Question MAA703 Accounting for Management

Q This assignment is an individual assignment. The assignment should be grounded in literature and properly referenced. Any commonly used reference style (e.g. Harvard, APA) is acceptable. Submission of the assignment should be made via CloudDeakin. Background:

In contemporary management accounting practices, it is generally assumed that a cost (or part of it) would either change proportionally with the change in the cost driver (variable) or totally unresponsive to the change in the cost driver (fixed). However, recent research in cost behaviour shows that costs can be "sticky" (Anderson, Banker and Janakiraman, 2003). The identification of sticky cost behaviour can potentially have significant impacts on management accounting practices. Required:

Each student is required to prepare a written report on potential impacts of sticky cost behaviour on budgeting and evaluation of organisational performance. The report should address the following issues:

(a) What is the traditional view on cost behaviour?

(b) What is meant by sticky cost behaviour? What are the factors that lead to the occurrence of sticky cost behaviour?

(c) How would the budgeting practice be affected by sticky cost behaviour? (d) How would the evaluation of organisational performance be affected by sticky cost behaviour?

The report should be in essay format with a limit of 3,000 words.