Course Overview
Essential Budgeting And Costing Training : In today’s changing business conditions and intense competition, there is a need for businesses to understand essential budgeting and costing techniques. Purpose is to prepare effective annual budgets, forecast profitability on new products, initiatives, tender preparation and also whether is worth to reduce certain costs for decision making.
This course workshop exposes hands sample preparation of company annual costing and budget forecast which important in decision making tools. Participants will be required to understand, apply best practice for budget and forecast of sources of business revenue, costs, operating expenses, assets purchase, cash budget and forecast financial statements. It addresses practical challenges faced by professionals in accurately determining product or service costs and setting competitive yet profitable prices.
Course Objectives
On completion of the programme, participants will be able to:-
- Understand the importance of a well-defined budget process
- Understand costing components and techniques for products and services for pricing decisions.
- Understand and able to apply best practices in doing bottoms up monthly and annual budgeting based on top-down budget
- Learn how actual cost and budgeted cost analysis is monitored
- Apply cost allocation methods to assess product and service profitability.
- Distinguish between fixed, variable, direct, indirect costs, sunk cost, future costs and incremental costing for business decision making.
Course Methodology
Where appropriate, training delivery approaches will include the following:
- Online Lecture & Videos
- Online faciliated Group Discussions & Spot Quizzez
- Pre and Post Test Quiz
- Practical exercises and case studies.
Note: Laptop is needed for excel financial costing and budgeting exercises
Who Should Attend
Entrepreneurs, business professionals, accounting and finance managers, senior & junior executives who are involved in an annual budget, doing costing of products and services for pricing decisions and project tender submission. Managers and Directors that wish to use costing and budgeting knowledge to makes a better business decision. This can be extended to all levels of employees who involved in budgeting and costing roles.
Course Content
Module 1: Financial Basics, Costing concepts and types of costs
Essentials financial terms
Cost center versus profit center
Categories of costs
Cost behaviour which is fixed costs and variable costs
Costs classification in an organization
- Direct costs versus indirect costs for material costing, labour costing and overheads costing.
- Controllable costs versus uncontrollable costs
Absorption costing versus Marginal Costing methods.
Module 2: Product and Services costing
Techniques on costing of raw materials based on Bill of Material (BOM) concept for products
Stock control methods and valuation (First In First Out (FIFO), LIFO (Last In First Out) and Weighted Average Method)
Inventory Costing relating to capacity Levels.
Gross Profit impact analysis under inventory costing method
Module 3: Labour Costing & Overhead Costing and Accumulation Systems
Manpower planning and resources costing
Calculation of labour cost per unit – direct cost
Calculation of Indirect labour costs per unit
Calculation of Overhead Absorption rate
Cost drivers and activity pools analysis as cost management and reduction techniques
Module 4: Costing Methods & Pricing Strategies
Job costing calculation – customized orders
Batch costing – Batch production orders
Process costing for joint products and by products with calculation of weighted average costs
Costing strategies for made-to-order and export-specific orders and dealing with small-batch, high-variety production with INCO (Shipping) terms, Freight, export duties, currency risks, tariffs risks.
Market-based pricing vs cost-plus pricing advantages and disadvantages
Module 5: Essential Annual Budget
Types of budgets for annual budget process
Understanding company strategies and SWOT analysis
Learning activity: Excel hands on template for bottoms up costing and setting of pricing with financial ratios
Module 6: Essential budget monitoring tools.
Understanding types of variance analysis reports: Actual versus Budget, Actual versus Forecast
Understanding specific finance variance report for business managers
- Revenue categories variance report
- Cost and expense variance
Module 5: Financial Statements Forecast Simulation
Calculate break-even units with target profit calculations and margin of safety units
Analysis costing profit or loss statements for cost monitoring and control
Analysis of key profitability ratios: Margin analysis based on profit and loss as baseline for budget simulation
Value costing analysis report on product continuation and discontinuation
