ACTIVITY-BASED COSTING TRAINING COURSE

Course Introduction

Activity-Based Costing Training Course is a comprehensive and practical professional programme designed to equip accountants, management accountants, finance managers, financial controllers, cost accountants, business analysts, operations managers, and finance professionals with advanced knowledge and practical skills in Activity-Based Costing (ABC), cost allocation, cost driver analysis, overhead management, profitability analysis, strategic cost management, and management accounting. The programme provides a detailed understanding of how organizations can identify the activities that consume resources and accurately assign costs to products, services, customers, processes, and business units. Participants will learn how Activity-Based Costing improves cost visibility, eliminates distorted traditional cost allocations, strengthens profitability analysis, and supports better financial and operational decision-making.
The course provides extensive coverage of ABC principles, resource pools, activity pools, cost drivers, activity cost rates, cost objects, cost allocation, overhead absorption, process costing, customer profitability, product profitability, service costing, and cost-to-serve analysis. Particular emphasis is placed on identifying appropriate cost drivers, measuring resource consumption, developing activity-based cost models, analysing cost behaviour, and evaluating the accuracy of traditional costing systems. Participants will also examine the relationship between Activity-Based Costing, Activity-Based Management (ABM), strategic cost management, budgeting, pricing, operational efficiency, and performance management.
Participants will develop practical capabilities in designing ABC models, collecting cost and operational data, identifying activities, selecting cost drivers, calculating activity rates, allocating overheads, analysing product and customer profitability, and interpreting cost information. The training addresses cost driver selection, data quality, cost pool development, resource utilization, capacity analysis, process improvement, cost reduction, pricing decisions, outsourcing, make-or-buy decisions, and strategic resource allocation. Relevant general case studies will demonstrate how organizations can uncover hidden costs, identify unprofitable products and customers, improve pricing, optimize processes, and strengthen cost management.
By the end of the training, participants will be able to design, implement, evaluate, and maintain effective Activity-Based Costing systems that support accurate costing, profitability improvement, strategic decision-making, and operational excellence. The programme is suitable for organizations seeking improved cost transparency, better overhead allocation, stronger profitability analysis, and more effective resource management. The course can be customized for banks, government institutions, NGOs, corporations, manufacturing companies, insurance companies, telecommunications companies, universities, hospitals, development organizations, retailers, and other entities requiring advanced cost accounting and management accounting capabilities.

Course Objectives

1. Understand the principles, concepts, applications, and benefits of Activity-Based Costing.
2. Distinguish between traditional costing systems and Activity-Based Costing methodologies.
3. Identify resources, activities, cost pools, cost objects, and appropriate cost drivers.
4. Develop activity cost pools and calculate accurate activity-based cost rates.
5. Allocate direct and indirect costs accurately to products, services, customers, and processes.
6. Apply Activity-Based Costing to product profitability, customer profitability, and cost-to-serve analysis.
7. Use ABC information to support pricing, budgeting, outsourcing, make-or-buy, and resource allocation decisions.
8. Apply Activity-Based Management to identify process inefficiencies, waste, and cost reduction opportunities.
9. Develop ABC reports, dashboards, profitability analyses, and management accounting information.
10. Design and implement an effective Activity-Based Costing system aligned with organizational strategy and performance objectives.

Organization Benefits

1. Improves cost accuracy and transparency across products, services, customers, and processes.
2. Provides better visibility into indirect and overhead costs.
3. Identifies the true cost of business activities and resource consumption.
4. Improves product, service, customer, and segment profitability analysis.
5. Supports more accurate pricing and margin management decisions.
6. Identifies inefficient processes, non-value-added activities, and cost reduction opportunities.
7. Improves resource allocation and operational efficiency.
8. Strengthens budgeting, forecasting, strategic cost management, and performance measurement.
9. Provides reliable cost information for outsourcing, make-or-buy, product mix, and investment decisions.
10. Supports sustainable profitability improvement and strategic competitive advantage.

Target Participants

The course is designed for Chief Financial Officers (CFOs), Finance Directors, Finance Managers, Management Accountants, Cost Accountants, Financial Controllers, Chief Accountants, Financial Analysts, Business Analysts, Operations Managers, Procurement Managers, Supply Chain Managers, Commercial Managers, Budget Managers, Pricing Managers, Auditors, Internal Auditors, Finance Business Partners, Production Managers, and professionals responsible for cost accounting, profitability analysis, budgeting, pricing, performance management, and strategic decision-making.

Course Outline

Module 1: Activity-Based Costing Foundations and Cost Concepts

1. Introduction to Activity-Based Costing, strategic management accounting, cost management, and profitability analysis.
2. Traditional costing systems versus Activity-Based Costing and sources of costing distortion.
3. Understanding resources, activities, cost pools, cost objects, direct costs, indirect costs, and overheads.
4. Resource consumption, activity consumption, cost assignment, cost allocation, and cost tracing.
5. ABC implementation principles, benefits, limitations, organizational readiness, and success factors.
6. General Case Study: Comparing traditional costing with Activity-Based Costing in a manufacturing organization and identifying differences in product cost and profitability.

Module 2: Activity Identification, Cost Pools and Cost Drivers

1. Identifying organizational activities, processes, transactions, and resource-consuming activities.
2. Developing activity cost pools and assigning resource costs to appropriate activities.
3. Identifying primary and secondary cost drivers and understanding driver selection criteria.
4. Transaction drivers, duration drivers, intensity drivers, volume drivers, and structural cost drivers.
5. Measuring resource consumption, activity volumes, capacity utilization, and cost driver behaviour.
6. General Case Study: Developing activity cost pools and selecting appropriate cost drivers for procurement, production, distribution, sales, customer service, and administration activities.

Module 3: Designing and Implementing an ABC Costing Model

1. Developing an Activity-Based Costing framework from data collection through cost assignment and reporting.
2. Collecting financial and operational data from accounting, ERP, production, procurement, sales, and customer systems.
3. Calculating activity cost rates and assigning activity costs to products, services, customers, and processes.
4. Designing ABC spreadsheets, financial models, databases, and digital costing structures.
5. Validating ABC results, analysing costing assumptions, reviewing data quality, and maintaining costing models.
6. General Case Study: Designing an ABC model for a multi-product organization and calculating the activity costs and profitability of each product line.

Module 4: Activity-Based Costing for Profitability and Decision-Making

1. Product profitability, service profitability, customer profitability, segment profitability, and channel profitability.
2. Cost-to-serve analysis, customer transaction costs, service costs, distribution costs, and support costs.
3. Applying ABC information to pricing, product mix, customer segmentation, and margin management.
4. Relevant costing for make-or-buy, outsourcing, special orders, capacity utilization, and process decisions.
5. Scenario analysis, sensitivity analysis, contribution analysis, and strategic resource allocation.
6. General Case Study: Using ABC data to identify high-cost customers and low-margin products and developing strategic pricing and service recommendations.

Module 5: Activity-Based Management and Cost Optimization

1. Introduction to Activity-Based Management (ABM) and using ABC information to improve organizational performance.
2. Identifying value-added and non-value-added activities, waste, inefficiency, duplication, and process bottlenecks.
3. Process improvement, Lean management, workflow redesign, capacity optimization, and cost reduction.
4. Benchmarking activity costs, performance measurement, productivity analysis, and continuous improvement.
5. Linking ABC with budgeting, strategic cost management, performance management, and operational planning.
6. General Case Study: Applying Activity-Based Management to identify non-value-added activities and develop a cost optimization programme while maintaining service quality.

Module 6: Digital ABC, Analytics and Strategic Cost Management

1. Digital Activity-Based Costing, ERP integration, cloud accounting, financial analytics, and management accounting transformation.
2. Using Excel, Power Query, Power BI, databases, and business intelligence for ABC analysis and reporting.
3. Developing ABC dashboards for activity costs, cost drivers, product profitability, customer profitability, and resource utilization.
4. Automating cost data collection, cost allocation, reporting, monitoring, and ABC model updates.
5. Integrating Activity-Based Costing with strategic cost management, budgeting, forecasting, pricing, and performance measurement.
6. General Case Study: Developing a digital ABC dashboard and strategic cost management framework linking activity costs, cost drivers, profitability, operational efficiency, and management decisions.

General Information

1. Customized Training: All our courses can be tailored to meet the specific needs of participants.
2. Language Proficiency: Participants should have a good command of the English language.
3. Comprehensive Learning: Our training includes well-structured presentations, practical exercises, web-based tutorials, and collaborative group work. Our facilitators are seasoned experts with over a decade of experience.
4. Certification: Upon successful completion of training, participants will receive a certificate from Foscore Development Center (FDC-K).
5. Training Locations: Training sessions are conducted at Foscore Development Center (FDC-K) centers. We also offer options for in-house and online training, customized to the client's schedule.
6. Flexible Duration: Course durations are adaptable, and content can be adjusted to fit the required number of days.
7. Onsite Training Inclusions: The course fee for onsite training covers facilitation, training materials, two coffee breaks, a buffet lunch, and a Certificate of Successful Completion. Participants are responsible for their travel expenses, airport transfers, visa applications, dinners, health/accident insurance, and personal expenses.
8. Additional Services: Accommodation, pickup services, flight booking, and visa processing arrangements are available upon request at discounted rates.
9. Equipment: Tablets and laptops can be provided to participants at an additional cost.
10. Post-Training Support: We offer one year of free consultation and coaching after the course.
11. Group Discounts: Register as a group of more than two and enjoy a discount ranging from 10% to 50%.
12. Payment Terms: Payment should be made before the commencement of the training or as mutually agreed upon, to the Foscore Development Center account. This ensures better preparation for your training.
13. Contact Us: For any inquiries, please reach out to training@fdc-k.org or call us at +254712260031.
14. Website: Visit our website at www.fdc-k.org for more information.