Cost Management, Finance & Banking

Cost Management and Production Process with ABC and TOC

The program will enable participants to understand and apply appropriate strategic financial management tools to manage the cost of committed resources. Committed resources are those that management commits to in advance of the actual use of the resources, which are also sometimes referred to as "fixed costs".

This course discusses two approaches to managing the cost of committed resources: Activity Based Costing (ABC) and Theory of Constraint (TOC).

ABC is used to differentiate between the amount of resource that is supplied and the amount of resource that is actually used. According to TOC, management should not waste time trying to "manage" committed costs, but rather should focus on maximizing the amount of total system throughput.

Course Outlines

• Activity Based Costing / ABC.
• Theory of Constraints / TOC.
• Flexible and Committed Resources
• Capacity and its limitations.
• Cost of Unused Capacity.
• Full-Absorption Costing, Variable Costing, and Throughput Costing.

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