PRODUCT COSTING STRATEGIES
A Look at the CRITICAL ELEMENTS of Product Costing. A 3-Day Class
OVERVIEW: This three-day class explores detailed applications and procedures relevant to the identification and development of product costing standards. Special attention will be given to cost roll-ups and work-in-process cost accounting methods for MRP components and sub-assemblies, MPS standard finished goods items, and final assembly scheduling (FAS) for custom assembled specials and other make-to-order products. Conceptual team-based simulations provided in this course focus on the methods and uses of standard product cost, purchasing, inventory management, production activity control, and work order management. Where possible, JIT-related topics like "Activity-Based Costing will be included.
COURSE DESCRIPTION: In this course we will set standards for purchased components and derive standards for manufactured items at all levels in the Bill of Material, including end-items. Once our standards are set, the class will explore various methods of tracking WIP cost and variances using standard cost, earned cost, and actual cost. These planning functions are simulated using participant examples wherever possible. Conference Room Pilot test data unique to your planning challenges can be used to "prove" the validity of techniques and methods and encourage participant involvement.
The source of inputs to each cost element will be investigated in detail to understand the cost impact of direct labor, variable and fixed overhead, and outside production costs. Source documents such as routers and bills of material will be discussed from a cost accounting viewpoint to first build-up labor and burden rates and then roll-up all cost elements level by level. Current costs and actual cost and their variances will also be reviewed. The creation, measurement, and tracking of costs using simulated data will allow participants to develop first-hand experience in the basics of cost accounting as it relates to manufacturing materials and processes. The preparation for identifying and establishing cost will include explanations of work center masters, router run-times, set-up times, outside production operations, crew factors and indirect labor operations. Additional discussion and practice will include other related topics such as shop floor reporting, production and employee efficiency reporting, work order cost adjustments and history retention, etc. The policies and procedures required to use standard product cost effectively will also be provided.
WHO SHOULD TAKE THIS COURSE
This detail-oriented course is recommended for all project team members. It is designed specifically for production managers, cost accountants, financial planners, engineers, and product-line managers who need to understand the methods used to establish and maintain cost standards. Effective "closed-loop" communication and accountability between production people and accounting people is enhanced by this course.