MODELS OF COST BEHAVIOUR: A MANAGERIAL PERSPECTIVE

Abstract

The paper considers the peculiarities of cost behaviour in the production of metallurgical products and their modelling. The industry specifics and their impact on cost formation and production of metallurgical products are assessed. The article develops step-by-step approaches to cost behaviour analysis. It is proved that one of the key aspects of the study of cost behaviour is the choice of an effective method of their accounting and calculation The main factors of external and internal direction of cost behaviour are formed. Peculiarities of application of the preliminary method of production are evaluated. The scheme of formation of accounting and analytical reflection of production of metallurgical products by the preliminary method at PJSC "Kamet-Stal" is developed. The accounting and analytical reflection of formation of the production cost of metallurgical products on the accounts is presented. The emphasis is placed on the peculiarities of accounting for the formation of the production cost of metallurgical products according to national accounting standards (regulations). A set of interrelated factors that shape and influence the behaviour of costs has been formed. It has been concluded that the most objective method for assessing cost behaviour is statistical correlation models. A regression equation as a linear model of cost behaviour has been formed. A linear model of cost behaviour has been calculated. The equation parameters, actual and tabulated coefficient of determination are determined. The relationship between the volume of pig iron production and changes in total fixed costs is substantiated. The closeness and significance of the relationship are estimated. Analytical conclusions are formed and the main directions of the cost management strategy are developed. It is proposed to forecast costs using the tested model. It has been concluded that the developed model of cost behaviour of metallurgical products (liquid cast iron) can be useful in the practical activities of an enterprise for making effective management decisions in both the short and long term.