Cost & Management Accounting & Types of costs involvement.
Direct costing as an analysis tool & Cost volume profit analysis.
Target costing & Cost object analysis.
Process analysis & Zero base budgeting.
Cost reduction strategy & Compensation cost reduction.
Procurement cost reduction & Responsibility accounting.
Facilities cost reduction & Finance cost reduction.
Cost management is a form of management accounting.
Cost management is the process of planning and controlling the budget of a business which related to activities achieved by collecting, analyzing, evaluating and reporting cost information used for budgeting, estimating, forecasting, and monitoring costs.
1. Current Trends In Cost &
Management Accounting
-To Prof. Smita Jape Madam
Cost Accounting
2. Group Members
Pooja Kulkarni – B 31
Ravi Dongre – B 16
Tushar Sadhye – B 47
Sneha Dixit – B 15
Shweta More – B 36
Nikita Rathod – B 46
Sayali Phatak – B 44
3. Content Covered
Cost & Management Accounting & Types of costs
involvement.
Direct costing as an analysis tool & Cost volume profit
analysis.
Target costing & Cost object analysis.
Process analysis & Zero base budgeting.
Cost reduction strategy & Compensation cost reduction.
Procurement cost reduction & Responsibility
accounting.
Facilities cost reduction & Finance cost reduction.
4. Cost management
Cost management is a form of management accounting.
Cost management is the process of planning and
controlling the budget of a business which related to
activities achieved by collecting, analyzing, evaluating
and reporting cost information used for budgeting,
estimating, forecasting, and monitoring costs.
5. Types of Cost
Fixed cost
Variable cost
Marginal cost
Actual cost
Direct cost
Indirect cost
Economic cost
6. Direct costing as an analysis tool
Direct costing is a specialized form of cost analysis that only
uses variable costs to make decisions. It does not consider fixed
costs, which are assumed to be associated with the time periods
in which they were incurred.
Direct costing is of great use as an analysis tool. The following
decisions all involve the use of direct costs as inputs to decision
models.
Automation investment
Cost reporting
Customer profitability
Profit volume relationship
Outsourcing
13. Zero Base Budgeting
The Objective of Zero Based Budgeting is to
“reset the clock” each year.
Zero Based Budgeting implies that managers need
to build a budget from the ground up, starting at
zero.
Budgets are then built around what is needed for
the upcoming period, regardless of whether the
budget is higher or lower than the previous one.
14. Steps involved in Zero base budgeting
There are three Steps involved in Zero Base
budgeting :-
Identification of Decision Units
Development Of Decision Packages
Review and Ranking For Decision Making
15. Cost reduction strategies
Process ,systems and technological
improvements.
Behavior modifications.
Correction of billing errors.
Elimination of overcharges & unnecessary
services.
Rate reduction from current providers.
Savings from alternate providers.
16. Compensation cost reduction
Get management behind it.
Use modified duty.
Understand what contributes to your
workers compensation costs.
Train your employees well.
Actively put your policies into practice.
Report claims promptly
Investigate causes
17. Procurement cost reduction
5 trend in strategic procurement
Business Integration and Collaboration
Importance of Technology in Procurement
Centralization
Supplier Collaboration
Modern Procurement Organizations
18. Responsibility Accounting
Responsibility accounting is an underlying concept of
accounting performance measurement systems. The basic
idea is that large diversified organizations are difficult, if
not impossible to manage as a single segment, thus they
must be decentralized or separated into manageable parts.
1. Revenue centre-segment that generates revenue with
little cost
2. Cost centre- segment generate cost but no revenue
3. Profit centre-segment generates both revenue and cost
4. Return on investment -a segment such as a division of a
company where the manager controls the acquisition and
utilization of assets, as well as revenue and costs
19. Facilities cost reduction
7 Trends in facilities cost reduction :-
1. Doing more with less.
2. Automation.
3. Outsourcing.
4. Increasing complexity.
5. Value-driven design.
6. Energy conservation.
7. Short term staffing.
20. Finance cost reduction
5 trends in finance cost reduction:-
Cloud computing solutions.
Supply chain management.
Being prepared for risky times.
Go paperless.
Latching on to BYOD {Bring your own device} trend.