Introduction to Cost Accounting

This course will introduce the fundamentals of costing, pricing, budgeting and business performance analysis. The various methods for determining the cost per unit of products and services will be discussed and these will then be integrated with process for setting prices and determining the break-even point for business activities. The course will then explore the various types of budgets and how these can be used for planning and controlling business performance.

Course Outline (3 sessions x 3 hours)

Session 1
Understanding costs and cost behaviour
Direct Costs
Indirect Costs (Overhead)
Fixed Costs
Variable Costs
Different types of variability
Determining the cost of products and services
Absorption Costing
Marginal Costing
Time-Driven Activity Based Costing (basic introduction)
Job costing

Session 2
The use of costs in routine pricing
Cost-plus pricing
Market-based pricing
Break-even Analysis
Relevant range
Determining the Break-Even point
Special pricing situations
Relevant Costs
Sunk Costs

Session 3
Budgeting
Capital Expenditure Budget
Operating Expenditure Budget
Revenue Budget
Cash Budget
Rolling Budgets
Understanding business performance
Ratio Analysis
Trend Analysis
Budgetary Variances
Key performance Indicators (financial and non-financial)