Activities-Based Costing and Activity-Based Management Modeling Workshop

This extended two-day, intensive executive program provides all you need to know to begin your ABC implementation project. Participants learn specific actions needed to effectively implement and use ABC. While some theory is presented, the bulk of the pro-gram is devoted to demonstrating how ABC can be quickly and economically implemented. Participants should prepare them-selves for a unique learning experience designed to achieve quick and sustainable results.

Executive Overview of Activity Based Costing (ABC) and Activity Based Management (ABM)

• How the need was created for better cost accounting
  
  
• How to compare traditional and activity based cost reports
  
  
• Macro level Activity Based Costing
  
  
• Micro level Activity Based Costing
  
  
• Reasons for cost accounting and ABC
  
  
• Elements of financial costing, competitive costing, and managerial costing
  
  
• New P & L formats
  
  
• How to use Activity Based Costing to support Activity Based Management
  
  
• The importance of data integrity
  

Principles of ABC/ABM
· Important principles of ABC
· How not to take a good idea too far
· ABM: a systematic approach to eliminate waste

How to Implement ABC - A Nine Phase Plan
· The best way to approach an ABC/ABM implementation
· The importance of mobilizing employees early in the process

Phase 1-Preparing the company for ABC/ABM
· Defining ABC/ABM mission
· Determining the technical, organizational, cultural and
  external impediments to implementing ABC
· Determining training requirements
· Developing innovative cost reports including contribution
  focused product line P&Ls
· Identifying accounting rules
· Identifying regulatory, statutory, FASB and GAAP conflicts

Phase 2-Organizing to implement ABC
· Developing a reasonable implementation plan
· Determining the necessary resources for implementing
  ABC/ABM
· Organizing a cross-functional implementation team
· Analyzing why some ABC/ABM implementations fail and how
  your company can succeed

Phase 3- Developing a data integrity process
· Impact of poor data in any cost model
· How to develop a formal data integrity process
  Using Missing Data reports
  Using Cyclic Data Certificate reports
  Executive data integrity monitoring
· Leadership benefits from solving the data integrity problem

Phase 4-Determining the real sources of product cost
· How to define activity centers
· How to identify and differentiate Production Activity Centers
  (PACs) and Support Activity Centers (SACs)
· How to segment SACs into Factory Support Activity Centers
  (FSACs) and Business Support Activity Centers (BSACs)
· How to replace cost center, work center, profit center, and
  department definitions with new activity center definitions
· How to create the necessary general ledger accounts and
  interfaces

Phase 5-Describing the activities performed in each activity center
· How to determine each activity center's resources and create
  a 'resource schedule'
· How to identify and document significant activities performed
  in each activity center
· How to develop activity center specific definitions of
  'value-adding' (VA), 'non-value-adding' (NVA) and
  'non-value-adding-required' (NVAR)
· How to determine each activity center's 'customers'
· How to determine and document the level of effort required
  to support each internal 'customer'
· How to use the 'resource schedule' and 'activity analysis' to
  immediately begin reducing costs
· How to rank and select waste elimination projects using the
  2 2 4 2 matrix
· How to mobilize employees to eliminate non-value-added
  activities themselves

Phase 6-Determining the relationships of cost sources
· How to describe the relationships between production and
  support activity centers
· How to allocate individual cost partitions (instead of total
  activity center costs)
· How to develop a cost flow map

Phase 7-Developing an 'Activity Center Performance and Cost Diagnostic' (ACP&CD) tool to describe the total costs of each activity center
· How to develop and use cost diagnostic tools
· How to define the sequence of activity centers to analyze
· How to link diagnostic tools and invent new allocations rules
· How support costs can be automatically allocated via an
  activity model
· How to test diagnostic values by performing a 'slice' analysis

Phase 8-Calculating other allocation values
· How to develop a Material Acquisition Burden (MAB)
  diagnostic tool
· How to develop a Product Line Support Overhead (PLSO)
  diagnostic tool
· How to develop an Unmodeled Overhead (UO) diagnostic tool

Phase 9-Using Activity Based Costing to make decisions
· How to 'roll up' material, labor, burden and overhead into an
  activity based product line P&L
· How to use ABC within the confines of an existing database
· How to flow cost data into segmented P&Ls
· How to develop a Product Cost Portfolio Report
· How to replace financial reporting with causal metrics

Beyond ABC...Extending ABC into Predictive Cost Modeling
· Defining Predictive Cost Modeling (PCM)
· Understanding the comprehensive cost management
  database
· Using ABC to predict product line costs
· Using ABC to understand all sides of any business decision
· Extending the Product Cost Portfolio Report into
  PCM...turning ABC into a powerful decision tool
· Creating a simulation tool for predicting cost changes which
  result from multiple and concurrent cost parameter changes