Controlling II - Tools

Main seminar targets are: Cost accounting, Product costing, Performance and cost centre calculation, Activity based costing, Sales controlling, Financial planning and analysis, Flexible-budget, Standard costing, Target Costing, Kaizen Costing.

Controlling II - Tools  is based on the subjects (presented and discussed) of the seminar Controlling I - Connexions and reinforces the controlling-tools presented and discussed in the first stage. Controlling provides data for various purposes, including planning, budgetary control and product costing. Managers at all levels of a business - in service and in manufacturing industries- are customers of accounting information. Informed decisions have Controlling at their roots.

The essence of control is the comparison of performance against plan or target. The monitoring of progress and the comparisons with target reveal variations from the original plan (control activity) which can either be used to guide activities back towards the original plan or, if the monitoring of actual results and conditions shows that unforeseen conditions have arisen, can be used to revise the original plan. Control activity is of great strategic importance and is part of general plan reviews which are vital in volatile, uncertain conditions. Planning and control are distinct activities, but they go hand and hand. To maximize the benefits from planning (budgeting), the manager should use that plan as a benchmark for controlling (assessing the effectiveness and efficiency of implementation). Conversely, it is difficult to control activities without a benchmark plan.

When you have finished studying this course you should be able to:

define and explain: cost objects, direct cost and indirect costs;

explain the relationships of cost drivers, variable costs, and fixed costs;

explain the uses and limitations of unit costs;

differentiate between life cycle costs and period costs;

distinguish between the general and specific concerning cost-volume-profit;

specify the limiting assumptions of cost-volume-profit analysis;

distinguish between contribution margin and gross margin;

identify five steps in process costing;

describe activity-based accounting; related it to control and product costing;

describe activity-based accounting; related it to control and product costing;

construct a cash budget;

construct the supporting schedule and main statements for a master budget;

sales forecasting - a difficult task vs. financial planning;

distinguish between static budgets and flexible budgets;

use the flexible-budget approach to compute sales volume variances and flexible-budget variance;

identify the typical responsibilities for controlling variances in material costs, labour costs and overhead;

explain four ways to analyse factory overhead variances;

understand the technique of standard costing and its objectives;

know the various type of standards;

understand the principles of variance analysis;

know the relationship between variances;

describe mix and yield variances;

understand standard marginal costing;

know the principles of value analysis, value engineering, target costing, kaizen costing, ABC-ABM;

understand the principle of stock control (stock holding costs, ordering-costs, safety-cost, Economic Order Quantity -EOQ);

know the investment calculation.

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