Course Outline
Overview of Cost Centers and Fundamental Pricing Concepts
- The function and architecture of cost centers
- Cost categorization: fixed, variable, direct, and indirect
- Linking organizational units to cost centers
Establishment and Setup of Cost Centers
- Creation of new cost centers and groups
- Assignment of responsibilities, hierarchies, and control settings
- Management of master data and lifecycle processes
Identification of Cost Drivers and Allocation Procedures
- Selection and definition of cost drivers
- Allocation methods and their frequency
- Maintenance of allocation rules and schedules
Integration of Machine and Labor Hours
- Definition of machine hours and operator labor hours
- Collection of runtime metrics and operational logs
- Integration of hours into cost centers for accurate cost absorption
Bills of Materials (BOM) and Component Pricing
- BOM structures and cost rollup principles
- Management of multi-level BOMs and phantom assemblies
- Component substitution and cost impact assessment
Standard Pricing, Variances, and Reconciliation
- Setting standard costs and managing updates
- Recording and analyzing material and overhead variances
- Period-end reconciliation and corrective measures
Activity-Based Costing and Sophisticated Allocation Methods
- Designing activity pools and cost assignments
- Calculation of activity rates and unit costs
- Comparison of ABC with conventional allocation approaches
Absorption Pricing and Cost Aggregation
- Absorbing machine hours, labor hours, and overheads into product costs
- End-to-end pricing for finished goods and services
- Simulation of cost scenarios and what-if analyses
Controls, Auditability, and Compliance
- Implementation of access controls and change governance
- Audit trails for cost adjustments and revaluations
- Regulatory and reporting considerations
Performance, Optimization, and Cost Reduction Tactics
- Identification of high-impact cost drivers and hotspots
- Process improvements and cost-to-serve analysis
- Continuous monitoring and KPI design for cost centers
Summary and Subsequent Steps
Requirements
- A solid grasp of managerial accounting principles
- Knowledge of bills of materials and production workflows
- Operational experience with ERP or financial systems
Target Audience
- Cost accountants and financial analysts
- Product pricing and supply chain specialists
- 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.
