Cost Analysis to Support Strategic Decisions

Section One: Introducing the linkages between strategy and costing

• Managing contemporary organization
• Strategic Plan, Budgeting, Costing and Management Control
• Management Accounting for organizational control systems
• Responsibility accounting and the process-view
• The context for costing
• The Budget and its role in achieving organizational targets
• What is the situation in your organization?

Section Two: Cost analysis and classifications

• Cost terms and classification
• Inventoriable vs. period costs
• Manufacturing vs non-manufacturing costs
• Variable vs. Fixed costs (CVP analysis)
• Direct vs. indirect cost
• Under-costing and Over-costing problems
• Problems and Examples – Case study illustration
Cost analysis and classifications
• Cost terms and classification
• Inventoriable vs. period costs
• Manufacturing vs non-manufacturing costs
• Variable vs. Fixed costs (CVP analysis)
• Direct vs. indirect cost
• Under-costing and Over-costing problems
• Problems and ExVariable vs. Fixed costs (CVP analysisDirect vs. indirect cost
• Under-costing and Over-costing

Section Three: From cost accounting to management control

• Cost allocation: traditional costing and activity-based costing (ABC)
• From traditional budgeting to Activity-based budgeting (ABB)
• Activity-based management
• Decentralized organizations
• Cost/Profit/Investment centers
• Transfer-pricing issues
• Problems and Examples – Case study illustration
From cost accounting to management control
• Cost allocation: traditional costing and activity-based costing (ABC)
• From traditional budgeting to Activity-based budgeting (ABB)
• Activity-based management
• Decentralized organizations
• Cost/Profit/Investment centers
• Transfer-pricing issues
• Problems and Examples – Case study illustration

Section Four: Flexible budgets and variance analysis

• The features of the budgetary control
• Define the master budget and explain its major benefits to an organization
• Describe the difference between a static budget and a flexible budget
• Compute flexible-budget variances and sales-volume variances
• Explain why standard costs are often used in variance analysis
• Integrate continuous improvement into variance analysis
• Case study, problems, and exercises

Section Five: Linking strategy to actions: Beyond costing

• Shortcomings of traditional approaches to measurement
• The Balanced Scorecard: Linking Strategy to Performance Measurement
• Financial perspective, Customer perspective
• Internal Business Process perspective, Learning and growth perspective
• Developing and adapting scorecard
• Case study illustration