Advanced Cost Management for the Competitive Business Environment

Introduction

Having the best information is the key to success. In today’s business environment, the development and use of information especially cost management information – is a critical factor in the effective management of a firm or organization. As the business environment has changed, the role of cost management information has expanded to serve all management functions. The study of management and cost accounting yields insights into the changing roles and relationship between managerial activities and accounting intelligence. What types of decisions do managers make? How can accounting and management accounting information help managers make these decisions?

This course addresses these questions and looks at some fundamental and also advanced management accounting techniques used in modern enterprises. The aim is to equip business managers and management accounting with the necessary tools and knowledge to progress in the new competitive environment.

Objectives

Participants gain the insights they need to win in the global marketplace. Key subjects that the course addresses include:

• Information for informed management decisions
• Management use of management accounting information
• A new role for the management accountant
• Cost management and Strategy
• Basic Cost and Cost Analysis
• Cost Behavior and Cost Estimation
• Different Approaches to Costing (Standard Costing, Activity-Based Costing, …)
• Product costing in multinational firms
• Cost Planning and Budgeting
• Decision Making with Relevance Costs and a Strategic Emphasis

Training Methodology

This is an interactive course. There will be open question and answer sessions, regular group exercises and activities, videos, case studies, and presentations on best practices. Participants will have the opportunity to share with the facilitator and other participants on what works well and not so well for them, as well as work on issues from their own organizations. The online course is conducted online using MS-Teams/ClickMeeting.

Who Should Attend?

Non-Financial managers from all functions of an enterprise will benefit from this intensive course which teaches the key financial issues covered in international MBA programs. Financial managers wanting an update or ‘refresher’ of their knowledge will also benefit from attending. In detail:

• Managers with direct financial responsibilities
• Cost and management accountant
• Financial planners and cost analysts
• 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 planning, budgeting, cost terms, and techniques.
• Managers who have to plan, cost, and budget new business ventures.
• Managers and Supervisors from every business discipline and department have to run departments and plan, cost and budget during their business lives.
• First appointment managers on fast-track development programmers
• Managers who require a refresher programmer on the topic or who would benefit from having an opportunity to consider new ideas and methods

Course Outline

Day 1: Management and Cost Management Fundamentals: a Review of Key Cost Concepts

• The accountant’s role in the organization
• An introduction to cost terms and purposes
• The use of cost management information
• Creating cost-aware organizations
• Review of some key cost concepts
• Product vs. Period costs
• Direct and Indirect Costs
• Cost behavior: Fixed and Variable Costs
• Problems and Examples

Day 2: Different Approaches to Costing: Part 1

• Absorption (Full) vs. Variable costing
• 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: Different Approaches to Costing: Part 2

• Job-costing systems
• Process costing systems
• Cost allocation
• Cost allocation: joint-cost situation
• Transfer pricing
• Problems, Case Study, and Exercises

Day 4: Different Approached to Budgeting

• Fixed and flexed budget (static and flexible budget)
• Rolling budget
• Zero-based budgeting
• Activity-based budgeting
• Master budget
• From costing to budget: interpreting variances (variance analysis)
• Integrate continuous improvement into variance analysis.
• Problems, Case Study, and Exercises

Day 5: Cost Planning and Pricing Decisions: Life-Cycle-Costing, Target costing, and Target Pricing

• Linking process development to costing
• Target costing, target pricing, and its implications
• The three major influences on pricing decisions
• Distinguish between cost incurrence and locked-in costs
• Cost-plus approach to pricing
• Life cycle product budgeting and costing to assist in the pricing decision
• Problems, Case study, and Examples