salesit-2 and salesit < salesit-1 equals 1; otherwise; equals 0) multiplied by log change of sales. (control variable) : Dummy variable (if salesit-1 < salesit-2 and salesit > salesit-1 equals 1; otherwise; equals 0) multiplied by log change of sales. (control variable) : Dummy variable (if salesit-1 < salesit-2 and salesit < salesit-1 equals 1;otherwise;equals 0) multiplied by log change of sales. (control variable) Model (2) captures the relationship between demand uncertainty and sales, general and administrative costs behavior. (2) : Cost stickiness measure which is calculated by model (4) : Demand Uncertainty that is calculated by standard deviation of revenue changes. : Dummy variable (if salesit-1 > salesit-2 and salesit < salesit-1 equals 1; otherwise; equals 0) multiplied by log change of sales. (control variable) : Dummy variable (if salesit-1 < salesit-2 and salesit > salesit-1 equals 1; otherwise; equals 0) multiplied by log change of sales. (control variable) : Dummy variable (if salesit-1 < salesit-2 and salesit < salesit-1 equals 1; otherwise; equals 0) multiplied by log change of sales. (control variable) Model (3) is regressed cross-sectionally in order to measure cost stickiness of cost of goods sold. (3) : Log change of cost of goods sold. : Log change of revenue : Dummy variable (if salesit < salesit-1; equals 1; otherwise; equals 0) multiplied by log change of sales. Model (4) is regressed cross-sectionally in order to measure cost stickiness of sales, general and administrative costs. (4) : Log change of sales, general and administrative costs. : Log change of revenue : Dummy variable (if salesit < salesit-1; equals 1; otherwise; equals 0) multiplied by log change of sales. Results Results of analyzing 1340 firms-year observations from the year 1382 to 1392, using multivariable regression analysis, indicate that demand uncertainty lowers the cost of goods sold rigidity. In other words, on the condition of increasing demand uncertainty, rigidity of the cost of goods sold is decreased and cost structure would become more flexible; but this significant behavior was not observed in the sales, general and administrative cost behavior. Results of testing the first hypothesis indicates that there is a positive and significant relationship between demand uncertainty and cost behavior. Positive sign of the coefficient means that higher demand uncertainty causes the COGS structure to become more flexible. Results of testing the second hypothesis indicate that changes of demand uncertainty cannot change the elasticity or behavior of sales, general and administrative costs. Discussion and Conclusion Cost management in relation to production and sales is a critical factor for company success. Developing a cost management strategy requires the selection and support of a resource procurement plan (Anderson et al. 2012). The purpose of this article was to investigate the role of demand uncertainty in cost behavior. In our empirical analysis, we used firm-level data from Tehran Stock Exchange firms. Analysis of cost of goods sold indicates demand uncertainty causes more flexible structure and less cost rigidity. But analysis of sales, general and administrative costs indicates that there is no significant relationship between demand uncertainty and cost behavior. In other words, an increase in environment uncertainty cannot change the structure of sales, general and administrative costs significantly. * Professor in Business Management, Tarbiat Modares University ** Ph.D. Candidate in Accounting, Tarbiat Modares University Corresponding author aidinkiani777@yahoo.com]]>