Effective Cost Control Strategies

Program Objectives:

By the end of the program, participants will be able to:

• Prepare a cash budget consistent with the organization’s strategic plan.
• Use appropriate estimation techniques in the development of revenue and expense budgets.
• Identify all the appropriate costs to be included in a capital expenditure proposal.
• Apply cost control tools, analyze management variance reports and take proper corrective action.

Who should attend:

All managers, supervisors and analysts who prepare and/or use management budgets.

COURSE OUTLINE 1 Day

Cost Control

• Budget as a Control Tool
• The Control Process
• Characteristics of an Effective Control System
• Responsibility Reporting
• Variance Analysis: Identifying the Components of Variance
• Variance Analysis: Taking the Corrective Action

Capital Expenditure Budgeting and Analysis

• Time Value of Money
• Simple versus Compound Interest
• Identifying and Analyzing Cash Flows
• The Discount Rate: Using Cost of Capital
• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Profitability Index (PI)
• Pay-Back Period (PBP)
• Accounting Rate of Return (ARR)
• Approval for Expenditure (AFE)
• Sensitivity and Risk Analysis

Cost Volume Profit Analysis (CVP)

• Identifying the Fixed Costs and Variable Costs
• Computing Breakeven Point in Units
• Computing Breakeven Point in Sales