ESSENTIAL COSTING TECHNIQUES

INTRODUCTION FOR ESSENTIAL COSTING TECHNIQUES

In today’s changing business conditions and intense competition, there is a need for all functional or business heads to understand essential cost accounting techniques. Purpose is to ascertain and implement cost reduction strategies, especially during uncertain business times. 

The course is designed to equip participants with a solid foundation in cost analysis, cost allocation, and pricing strategies. It addresses practical challenges faced by professionals in accurately determining product or service costs and setting competitive yet profitable prices.

Businesses that don’t control their costs don’t stay in business. Is everyone in your organisation sufficiently aware of costs, managing them effectively and maximising opportunities to reduce them? If there is scope for improvement, this course will help companies back on track on basics of costing techniques. 

LEARNING OBJECTIVE

On completion of the programme, participants will be able to:-

1. Being aware of costs and expense for different types of costing techniques
2. Seeking and managing cost reduction
3. Understanding analysis and monitoring tool and reports for cost reduction
4. Ensuring cost reports lead to action
5. Apply cost allocation methods to assess product and service profitability.
6. Distinguish between fixed, variable, direct, and indirect costs.

WHO SHOULD  ATTEND

Professionals, Managers, Senior & Junior Executives who had profit center and cost center responsibilities. This can be extended to all levels of employees who involved in costing and implement cost reduction.

TRAINING METHODOLOGY

Where appropriate, training delivery approaches will include the following:

• Online Lecture & Videos
• Online faciliated Group Discussions & Spot Quiz
• Practical exercises-Cost Mapping Exercise – 
• Participants classify and map costs for a simulated product. 
• Case studies.

COURSE OUTLINE

Module 1: Fundamentals of cost accounting and its related terms 

• Cost center versus profit center
• categories of costs

Module 2: Introduction to types of costs

• Cost behaviour which is fixed costs and variable costs 
• Costs classification in an organization
  1. Direct costs versus indirect costs for material costing, labour costing and overheads costing.
  2. Controllable costs versus uncontrollable costs
  3. Marginal and value costing technique for decision making 
  4. Cost reporting techniques – Difference between absorption costing and marginal (variable) costing reports.

Module 3: Inventory costing

Techniques on cost accounting for materials and include stock control methods and valuation (First In First Out (FIFO), LIFO (Last In First Out) and Weighted Average Method)

Module 4: Labour Costing techniques based on industry

• Calculation of labour cost per unit – direct cost
• Calculation of Indirect labour costs per unit

Module 5: Overhead costing 

• Calculation of Overhead Absorption rate
• Cost drivers and activity pools
• Application of overheads to products/services

Module 6: Cost Classification and Accumulation Systems

• Job costing, service costing, process costing, batch costing
• Activity Based Costing (ABC)
• Period versus Product Costs

Module 7: Cost Volume Profit Analysis & cost monitoring techniques

• Contribution margin calculation for quick decision making
• Break-even and target profit calculations
• Margin of safety and sensitivity analysis
• Standard costing and variance analysis for continuous improvement