Course Description

Building on cost-analysis fundamentals, this programme tackles and addresses advanced key issues in cost accounting, such as continuous improvement of cost assignment, activity-based analysis, strategic cost control, and performance evaluation. The programme incorporates some recent management accounting approaches & techniques which organizations must consider if they want to stay competitive. In this programme you will master how to:

·         effectively allocate overhead, and prevent over- or under-costing of products

·         implement activity-based costing and management

·         evaluate variances to identify the true cause of less than optimal performance

·         link costing, budgeting and management

Course Objective

Participants attending the programme will:

·         Create a greater cost awareness

·         Describe advanced cost analysis techniques

·         Select the costing measurement system that works

·         Discuss real case studies

·         Illustrate the features of the Activity-analysis philosophy

·         Discuss the linkages between activity-based costing and management

·         Provide insight into the fastest-growing and least visible elements of cost-overhead

·         Improve profitability by monitoring cost and performance

·         Describe the importance of transfer pricing

·         Improve the effectiveness of budgeting by identifying the cost/performance relationship of different service levels

·         Encourage continuous improvement and total quality management because planning and control are directed at process level

 TRAINING METHODOLOGY

We combine theory and practice. Therefore, besides in-class lectures, discussions and exercises, we use company examples to illustrate how the techniques presented have been applied in real case studies.

 

Who Should attend?

 

·         Managers with direct financial responsibilities

·         Cost and management accountant

·         Senior managers who supervise people with financial responsibilities

·         Financial and budget controllers who are moving to wider responsibilities

·         Managers who need to know more about business budgeting, costing terms and techniques.

·         Managers who have to plan, cost and budget new business ventures.

·         Managers and Supervisors from every business discipline and department who have to run departments and plan, cost and budget during their business lives.

·         First appointment managers on fast-track development programmes

·         Managers who require a refresher programme on the topic or who would benefit from having an opportunity to consider new ideas and methods

Course Outline

 

The programme builds on cost analysis to covers all the essential skills and tools needed to understand and improve the organizational cost structure. There will be discussions and active presentations on key advanced cost accounting techniques such as activity-based costing, in depth variance analysis, target costing, transfer pricing. All participants will return to their organisations with new (or refreshed) skills and capabilities in order to lead or implement processes of cost analysis and improvement.

PROGRAMME OUTLINE

DAY 1 – Review of key cost concepts

·         The issue of "costing”

·         Creating cost-aware organizations

·         Review of some key cost concepts

·         Product vs. Period costs

·         Absorption (Full) vs. Variable costing

·         Cost behavior: Fixed and Variable Costs

·         Direct and Indirect Costs

·         Problems and Examples

DAY 2 - Activity-based analysis: from costing to management

·         Under-costing and over-costing: the consequences for profitability

·         How to refine a costing system?

·         Activity-based costing (ABC) and cost-management

·         Cost hierarchy & Cost drivers

·         Linking resources, activities and management

·         Introducing Activity-based management (ABM)

·         Linkages between ABM and ABC – monitoring value creation

·         Problems, Case Study and Examples

DAY 3 – Costing, Flexible Budgets and Variance Analysis

·         From costing to budget: interpreting variances

·         Define the master budget and explain its major benefits to an organization

·         Describe the difference between a static budget and a flexible budget

·         Compute flexible-budget variances and sales-volume variances (level 1 variances).

·         Compute the price and efficiency variances for direct-cost categories (level 2 variances).

·         Explain why standard costs are often used in variance analysis.

·         Integrate continuous improvement into variance analysis.

·         Problems, Case Study and Exercises

DAY 4 – Target costing and transfer pricing

·         Linking process development to costing

·         Target costing and its implications

·         Decentralized organizations

·         Cost/Profit/Investment centers

·         Transfer-pricing issues

·         Linkages with performance evaluation

·         Problems, Case study and Examples

DAY 5 – Beyond compliance: the role of finance for integrated governance

·         What is the actual role of Finance?

·         Compliance and Corporate Governance

·         Beyond compliance: the role of performance and knowledge

·         Costs, budgets and variance analysis as tools for communications

·         Beyond budgeting: integrating financial and non-financial issues

·         Six-sigma and the "integrated governance scorecard” ™

·         Case, problems and examples