Course Outline
Introduction to Cost Centers and Foundational Costing Concepts
- The purpose and structural framework of cost centers.
- Cost classification: fixed, variable, direct, and indirect.
- Mapping organizational units to specific cost centers.
Creating and Configuring Cost Centers
- Defining new cost centers and organizing cost center groups.
- Assigning responsibilities, hierarchies, and control parameters.
- Managing master data and lifecycle operations.
Cost Driver Identification and Allocation Routines
- Selecting and defining appropriate cost drivers.
- Determining allocation methods and frequency.
- Maintaining allocation rules and schedules.
Integration of Machine Hours and Labor Hours
- Defining machine hours and operator labor hours.
- Capturing runtime metrics and operational logs.
- Integrating hours with cost centers for precise cost absorption.
Bills of Materials (BOM) and Component Costing
- BOM structures and the principles of cost rollup.
- Handling multi-level BOMs and phantom assemblies.
- Analyzing component substitution and its cost impact.
Standard Costing, Variances and Reconciliation
- Establishing standard costs and managing updates.
- Recording and analyzing material and overhead variances.
- Executing period-end reconciliation and corrective actions.
Activity-Based Costing and Advanced Allocation Techniques
- Designing activity pools and assigning costs.
- Calculating activity rates and unit costs.
- Comparing ABC methods with traditional allocation approaches.
Absorption Costing and Cost Rollups
- Absorbing machine hours, labor hours, and overheads into product costs.
- Performing end-to-end costing for finished goods and services.
- Simulating cost scenarios and conducting what-if analyses.
Controls, Auditability and Compliance
- Implementing access controls and change governance.
- Maintaining audit trails for cost adjustments and revaluations.
- Addressing regulatory and reporting considerations.
Performance, Optimization and Cost Reduction Strategies
- Identifying high-impact cost drivers and hotspots.
- Driving process improvements and cost-to-serve analysis.
- Designing continuous monitoring and KPIs for cost centers.
Summary and Next Steps
Requirements
- A solid understanding of managerial accounting principles.
- Familiarity with bills of materials and production processes.
- Operational experience with ERP or financial systems.
Audience
- Cost accountants and financial analysts.
- Specialists in product costing and supply chain management.
- ERP functional consultants and system integrators.
Testimonials (4)
How to manage business financials
surprise mtileni - Hatima Holdings (Pty) ltd
Course - Learning Xero
Good communication, open for discussion, kept it interesting and engaging
Ahmet Keyman - Keytrade AG
Course - Management Accounting and Finance for Non-Finance Professionals
Experience of the trainer and his way of conveying the content
Roggli Marc - Bechtle Schweiz AG
Course - FinOps
The trainer did not leave a single minute unexploited! He was up a storm throughout every lesson and provided much material for whatever he dealt with.
