Do you know who your most profitable customers are? Do you know the true cost of each of your products or services? Does your pricing reflect the full cost of serving the customer? What drives cost and value for money in your organisation?
This information is vital, especially as you build your strategy, but rarely available. The problem is that the information from your accounting systems is designed for external reporting and to meet tax requirements. There’s a big difference between accounting information and the true economics of the business. Activity based costing fills this gap.
In this 3-day course we will give you tools and techniques to:
- Determine the true profitability of each of your customers
- Segment customers and markets
- Understand the true costs of your products and services
- Make better pricing decisions
- Eliminate costly and non-value adding activities
- Effectively challenge your operating costs
The course introduces the concepts of activity-based costing for the small and medium business and then develops these in a two-day practical workshop teaching how to build and use MS Excel activity-based costing models.
Activity based costing is often associated with manufacturing businesses but is applicable to any organisation that has products or services. The course looks at application of activity based (or output) costing in service industries and in the public sector.
During this workshop, you will:
- Use the cause-and-effect “lens” of activity-based costing to design a cost model that accurately reflects the fundamental economics that underlie your organisation
- Accumulate a “toolbox” of costing concepts, tools and techniques that will help to incorporate seemingly complex issues into your costing model with a minimum of difficulty
- Incorporate your cost model’s design into an Excel-based predictive cost model that can be used to perform incremental cost analyses, measure the cost of key processes and develop rates that can be used to assign costs to individual jobs, products, services, customers, etc.
- Create Excel-based templates that will use your model’s costing rates to accurately assign costs to your company’s jobs, products, services, customers, markets, etc.
- Practice using your model to support a variety of management decisions
- Learn techniques for gathering your company’s detailed information for populating your model and templates after your return home
Please note that this course is one in a series of management accounting titles. See all related courses below: