Cost Analysis, Control and Optimization

Course outlines:

Module One:

Strategic need for analysing and managing costs

• Definition of cost management
• Dimensions of cost management
• Product costing systems: concepts and design issues
• Cost behaviour, types and hierarchy
• Cost accumulation job shop
• Batch production operations
• Variable versus absorption costing
  

Module Two:

Cost management decisions

• Decision making process
• Identifying relevant costs
• Evaluating alternatives
• Outsourcing decisions: make or buy
• Add or drop product or business line
• Replacing equipment
• Special order pricing decisions

Module Three:

Activity based management

• ABC systems
• Analyzing value added versus non value added activities
• Activity-based management
• Managing customer profitability
• Managing quality and time to create value

Module Four:
Cost estimation and transfer pricing

• Cost estimation techniques
  • Identifying and choosing a cost driver
  • Simple regression analysis
  • Multiple regression analysis
  • High-low method
  • Applications in Microsoft Excel
• Allocating costs of support departments
  • Direct method
  • Step method
  • Reciprocal method
• Inter-group transfer pricing issues

Module Five:
Evaluating and managing performance

• Cost, volume, profit analysis
• Breakeven point
• Breakeven point for multiple products
• Target income
• Operating leverage
• Margin of safety
• Managing scarce resources
• Flexible budget
• Activity-based budgeting
• Strategy, balanced scorecards, and performance measurement