Abstract:
The purpose of this paper is to analyse the cost structure of manufacturing
companies in an emerging economy. The data was collected from 41 listed
manufacturing companies in Sri Lanka mainly through a structured
questionnaire and an analysis of company records. In addition, to analysing
the data descriptively, we used correlation and regression models. The
findings suggest that despite the majority of costs being variable, there are
great differences among the companies in the composition of costs. There is
no relationship between the cost structure and the level of advanced
manufacturing technology used, which suggests a low level of technologyrelated
costs in the cost structure. Budgeting and cost control are the main
reasons for classifying costs while there is inadequate use of information for
strategizing pricing decisions. Differences were also observed in the
classification of the manufacturing cost items in the respondent companies.
Finally, all the findings confirm that accounting practices in emerging
economies are shaped by their environment as well. The study also reveals
certain managerial and policy level implications.
