Course Objectives
When you have completed
this workbook you will be better able to:
- identify different costs and how they behave
- appreciate how important it is to control costs
- understand how standard costing techniques help to control costs
- use different methods for controlling and reducing costs
- understand what a budget is and how they are used
- help to draw up workable budgets
- use some budgetary control techniques
Assessment Criteria
Know how to work to a budget
1.1 Explain the importance of agreeing to a budget and operating
within it
1.2 Describe a method to monitor variance between actual performance
and budget
1.3 Explain how information used in determining and/or revising
budgets is gathered
Understand costs within an organization
1.1 Explain fixed and variable costs; and the concept of break even
in relation to the organization
1.2 Explain the purpose and nature of basic cost statements
1.3 Explain the value of standard costing and its role as a control
mechanism
1.4 Briefly describe mechanisms in the organization to maintain
control of costs
International
Curriculum
Unit 3.27 - Official ILM
Curriculum, Institute of Leadership & Management
Course Outline
Workbook introduction
1 ILM Super Series study links
2 Links to ILM qualifications
3 Workbook objectives
4 Activity planner
Session A - CLASSIFYING COSTS
1 Introduction
2 Organizational Costs (Activity 1)
3 Labor Costs
4 Materials Costs (Activity 2)
5 Overheads (Activity 3, 4)
6 Fixed and Variable costs (Activity 5)
7 Break-Even Analysis (Activity 6, 7, 8)
8 The Need to Control Costs (Activity 9, 10, 11)
Self Assessment, Summary
Session B - STANDARD COSTING
1 Introduction
2 Setting Standards
- Standard cost rates (Activity 12)
- Standard performance rates (Activity 13)
- Standard costing and non-manufacturing organizations (Activity 14)
3 Standard Costing in Practice (Activity 15, 16)
4 Variances from Standard
- Direct material cost variances (Activity 17)
- Direct labor cost variances (Activity 18)
- Calculating and presenting variances (Activity 19)
5 The Value of Standard Costing
Self Assessment, Summary
Session C - CONTROLLING AND REDUCING COSTS
1 Introduction
2 Cost Information and Decisions (Activity 20)
- Basic cost statements (Activity 21)
- Cost units (Activity 22)
3 Cost Centers (Activity 23)
- Cost codes (Activity 24, 25)
4 Control through Cost Centers
- Cost centers and materials costs (Activity 26, 27)
- Cost centers and labor costs (Activity 28, 29)
- Cost centers and overheads (Activity 30, 31, 32, 33)
5 Cost Consciousness (Activity 34)
- Spotting the need for cost consciousness and control (Activity 35)
- Involvement and communication (Activity 36, 37)
- Feedback (Activity 38, 39)
6 Checklists for Controlling Costs
- Checklist for the work team
- Checklist for materials
- Checklist for overheads
7 Cost Reduction (Activity 40, 41)
Self Assessment, Summary
Session D - WHAT IS A BUDGET
1 Introduction (Activity 42)
2 The Purpose of Budgets (Activity 43, 44)
3 Beginning a Budget (Activity 45)
4 Why Do We Need Budgets (Activity 46)
5 The Advantages of Budgets
6 Using Budgetary Control (Activity 47, 48)
Self Assessment, Summary
Session E - MONITORING PERFORMANCE AGAINST BUDGET
1 Introduction
2 Budgetary Control (Activity 49)
- Reporting actual results and variances (Activity 50)
- Why have the variances happened (Activity 51)
- Non-controllable costs (Activity 53)
- Causes of variances (Activity 54, 55, 56)
3 Flexible Budgets and Budgetary Control (Activity 57)
- The advantages of flexible budgets (Activity 58)
4 Non-Financial Budgets (Activity 59)
5 Standard Costing and Budgetary Control (Activity 60)
Self Assessment, Summary
Performance checks
1 Quick quiz
2 Workbook assessment
3 Work-based assignment
Reflect and review
1 Reflect and review
2 Action plan
3 Extensions
4 Answers to self-assessment questions
5 Answers to activities
6 Answers to the quick quiz
7 Certificate