Activity Based Costing (ABC) is a methodology that identifies within an organisation the activities that are responsible for generating costs.
The certain route to effective cost and profit management
Do you know that most businesses generate 120% of their profits from 80% of their customer base and then squander 20% of these profits on loss making products, on customers that are not profitable and on distribution channels that are too costly! Activity based costing (ABC) is your key to identifying and combating this waste.
The presenters of this course, Graham Muller and Brett Fuller have developed unique methods and proprietary tools to facilitate ABC analysis, thus empowering management to resolve significant business issues, such as: -
• The true cost of activities • Correct allocation of overhead expenses, where appropriate • Management performance measurements and internal benchmarking • The true profitability of products and service lines • Appropriate pricing • Correct levels for transfer prices within a company or group • Design of management information reports • Training for client staff to sustain and continuously improve the activity model • Planning of resources and equipment purchases for the future
Activity Based Costing (ABC) is a methodology that identifies within an organisation the activities that are responsible for generating costs. These activities contribute to the production of outputs in the form of products and services, and to the generation of revenue to assist in the sustaining of service delivery. ABC provides reliable information for costing products, for informing management on cost trends, for pricing and tariff decisions, for tracking financial information over time and for evaluating new service options.
In any organisation, raw material and bought-in component costs aside, the vast proportion of costs incurred are the result of activities undertaken by employees of the organisation. Activity Based Costing (ABC) is a methodology that identifies within an organisation what activities are responsible for generating which costs. These activities contribute to the production of outputs in the form of products and services, and to the generation of revenue to contribute profit and to assist in the sustaining and growth of the business. ABC provides reliable information for costing products, for informing management on cost trends, for pricing decisions, for tracking financial information over time and for evaluating product, customer and distribution channel profitability.
Our presenters have undertaken activity-based cost management work at, inter alia, Island View storage, Tongaat-Hulett Sugar, Sappi Forests, African Bank (Credit Indemnity Division), First National Bank, Ithala Bank, Total Oil, Portnet, Body Shop, Robertson Spices, SA Breweries and Merck Pharmaceuticals.
ABC enables management to understand the major cost drivers within the business, thus giving a perspective on cause and effect of costs, in addition to accurately reporting where costs have been incurred.
Why you should attend:
Well-documented results from ABC implementations around the world prove that this approach to cost and profit management achieves improved productivity, quality and customer satisfaction, reduced costs and waste with stunning bottom-line results.
This course, will give you the edge, with two presenters who together have more than thirty years of international and local ABC experience and wealth of knowledge.
No boring lectures! You will learn by practically experiencing ABC through a case study based on a manufacturing business. You will have fun learning while playing!
The course presenters:
Graham Muller BA (Hons), MSc (Econ), ACMA
A former partner of Deloitte Consulting, Graham has over fifteen years experience in the field of cost and management accounting in sub-Saharan Africa. His consulting work has focused mainly on manufacturing industry, banking and insurance and transport and logistics. He is a recognised expert in the activity-based costing field and has given papers on the subject at a number of conferences. He has also been extensively involved in the design and running of professional training courses and academic syllabi on the subject. Graham's clients include Island View Storage, Sappi Forests, African Bank, Portnet, Umgeni Water, Ithala Bank, SA Breweries, SA Mint, Mercedes Benz, Adcock Ingram, ABE Industrials, Merck, Coats Threads, Robertsons Spices, Total Oil, Renfreight, Old Mutual and First National Bank as well as the cities of Durban, Cape Town, East London, Grahamstown, King William's Town / Bisho and Pietermaritzburg,.
Brett Fuller B Bus Sci (Finance), BA (Economics), IMM Diploma in Marketing Management,
Brett Fuller has extensive experience in cost and management accounting spread over more than fifteen years. He has conducted a number of training courses and seminars on activity based management throughout Southern Africa. His clients include Island View Storage, African Bank, Sappi Forests, Portnet, Eskom, King William's Town, SA Breweries, Mercedes Benz, Adcock Ingram, ABE Industrials, SA Mint, Merck, Robertsons Spices, Old Mutual and First National Bank.
Course outline:
1. Introduction
1.1 What is activity-based costing (ABC)? 1.2 Outline of ABC methodology
3.1 Product lines 3.2 Business processes 3.3 Customers/Markets 3.4 Distribution channels 3.5 Branches/Subsidiaries
4. Discussion issues and tips
4.1 Coding and numbering systems 4.2 Data integrity
5. Activity attributes and their definition
5.1 Definition of an activity attribute 5.2 Examples of activity attributes
5.2.1 Time 5.2.2 Value added 5.2.3 Necessary 5.2.4 Direct 5.2.5 Quality 5.2.6 Customer service 5.2.7 Subcontracting 5.2.8 Environmental protection 5.2.9 Outside support 5.2.10 Production volume 5.2.11 Transaction volume 5.2.12 Automotive 5.2.13 Time 5.2.14 Facility consolidation 5.2.15 Standard, modification, new product 5.2.16 Type 5.2.17 Performance measurements
6. Cost drivers
7. Identification of activities
8. Tracing of costs to activities
9. Tracing costed activities to cost objects
10. Case study
11. Generic activity dictionary
12. Example of a detailed cost driver library
13. Example of a detailed business process library
Free handout to all course delegates:
All delegates will be provided with an 80 page manual detailing the course content and containing a step-by-step guide to the successful implementation of activity based costing.
Venue
Date: 07 May 2008 to 08 May 2008 Location: Hotel Apollo, Randburg
Connected by: Uninet
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