Methodological Foundations for the Formation of the Cost Function: Systematization of Approaches and Analytical Interpretation

Abstract

In the contemporary context of increasing complexity of production systems and the digital transformation of the accounting and analytical environment, the cost function acquires the status of a key instrument of strategic management accounting. Its application ensures a shift from mere cost recording to their formalized modeling for the purposes of forecasting, scenario analysis, and enhancing the validity of managerial decision-making. The subject of the study comprises the theoretical and methodological foundations for determining the parameters of the cost function and the instrumental-analytical systematization of methods for their estimation within the framework of enterprise strategic management. The purpose of the article is to develop a conceptually consistent classification model of methods for determining cost function parameters based on a multidimensional approach that takes into account the type of information base, the level of mathematical formalization, and the degree of analytical reliability of results. The methodological framework of the study is grounded in systemic and structural-logical approaches, the principles of strategic management accounting, as well as methods of comparative analysis, generalization, and analytical modeling. As a result of the research, an analytical classification model of cost function parameterization methods has been developed, ensuring their structuring according to conceptually defined criteria and providing a foundation for comparative assessment of managerial relevance. The study substantiates the identification of three methodological groups – normative-technological, analytical-empirical, and statistical-econometric – with specification of their informational support, computational procedures, and levels of result formalization. The existence of a relationship between the depth of mathematical data processing and the degree of reliability of analytical assessments is demonstrated. Based on calculations using data from a hypothetical enterprise covering 12 periods, a comparison of the high–low method and the least squares method was conducted, which confirmed the significant impact of the chosen approach on the accuracy of cost function parameter estimation and substantiated the advantages of using the full dataset to obtain more reliable results. Furthermore, the limits of applicability of each methodological group are determined depending on management objectives and the quality of the information environment. The practical significance of the results lies in the possibility of applying the proposed systematization for a well-grounded selection of tools for modeling enterprise cost behavior in the processes of budgeting, break-even analysis, parametric forecasting, and strategic planning. The proposed approach contributes to enhancing the analytical clarity of strategic management accounting and strengthening the adaptability of managerial decisions under conditions of economic volatility.