Main Information

Course Name

Course Code

4.1

Purpose

This training has the purpose of pointing out how the performance of the organization especially on financial perspective can be continuously improved by using Activity Based Costing and Management Systems. Throughout the course the differences between the traditional cost accounting systems and Activity Based Costing is explained and the calculation methods execution logic is described.

Duration

Prerequisites

Who should attend

Training Content

Part 01. Cost Accounting Information Systems

• Cost information improvement activity of ABC Company
• Development of cost information systems
  • The purpose of cost InformationThe purpose of cost Information
  • The change in production environment and effect on cost information systems.
  • The ratio of overhead expenses
  • Inadequacy of traditional cost accounting calculation systems.
  • The risks of incorrect and inappropriate cost information on the existing cost systems
  • The risks of accounting periods and traditional accounting principles for costing information systems.
  • Cost management system in the past and the future

Part 02. Traditional Cost Accounting

• Cost calculation systems
• Direct – Indirect costs
  • Direct costs
  • Indirect costs
  • Uniform accounting plan
• Cost Calculation choice according to production/ service presentation structure
  • Order cost
  • Process costing
• The flow of overheads in traditional cost information systems.
  • Phase 1: Distribution of overheads to expense areas.
  • Phase2: Distribution of the expenses accumulated from supportive production and service expenses to actual production/service points.
  • Phase 3: Addition of production / service expenses to products and services.

Part 03. Strategic Cost Management

• Use of cost information system to create competitive advantage.
  • Market Price/Cost leadership
  • Differentiation
  • Focusing
• CAM-I Cross and it meaning
• Strategic Management – ABC, BPR and performance management relationship

Part 04. What is Activity Based Costing?

• Development of activity based costing system
• What is Activity Based Costing?
  • Definition
  • Critical Points
  • Which organizations require ABC more?
  • What are the objectives of ABC?
    • Quality Costs
  • Basic working logic

Part 05. The calculation logic of ABC system

• Difference in calculation
• Distribution of costs
• CAM-I Cross

Part 06. Definition and Design of Activity Based Costing System.

• Activity, Resource, Cost Factor, Cost Item definitions
• Added Value Analysis
• Prerequisites of ABC information system
• Design phases of ABC system
  • Identification of activities
    • Definition
    • Hierarchy
      • SKU level
      • Batch level
      • Product level
      • Facility level
  • Grouping of activities
  • Costing calculation of activities
    • Identification of cost factors
    • Product variety
    • Rotational cost of activities
    • Batch size variety
    • Factors affecting identification of cost factors.
  • Assignment of costs on the basis of product/ customer /sales- distribution channel / order
  • Decision has to be taken about ABC System Design.
  • Project Team
  • Implementation phases

Part 07. Benefit expected from ABC system and activity based management.

• Benefits expected form ABC system
• Activity based management techniques
  • Operational
    • Reorganization
    • Process Management
    • Performance Management
• Strategic
  • • Profitability Analysis (Winning product, winning customer, winning distribution channel)
    • Use of cost information for supply chain management
    • Performance control of new product development process and putting into market
    • Product life cycle costs

Part 08. Activity Based Budgeting

• Comparison between traditional budgeting and activity based budgeting
• Activity Based Budgeting Logic
  • Interactive work planning
  • Backwards calculation

Part 09. ABC/M and other Performance Improvement Activities

• Continuous improvement
• Reengineering
• Benchmarking
• Strategic Corporate Performance Management – Balanced Scorecard
• ISO

Part 10. Activity Based Budgeting Project

• Pilot Study
• Implementation Plan
• Success factors
• Change Management

Remarks

At the end of the training attendants will learn;

• Difference between traditional cost accounting and activity based accounting systems
• How to develop a cost information system within their organization,
• How to use cost information system for making strategic and managerial decisions.
• How to make a dynamic activity based budget with the use of cost information

And,

• Will have the ABC application developed in MS Access environment

Further

• All attendants will receive a Training Participation Certificate.
• All attendants will receive a Printed Training Document.