Strategic Cost Management Course

Lesson 1 • Strategic Positioning and Cost Behaviour

Connects Porter's generic strategies to cost behaviour patterns. Students evaluate how cost leadership and differentiation shape cost structures.

Lesson 2 • Value Chain and Cost Drivers

Explains the value chain model and identifies structural and executional cost drivers. Students map cost drivers to activities across the value chain.

Lesson 3 • Ethical Dimensions of Cost Management

Addresses ethical responsibilities in cost reporting and decision-making. Establishes professional standards that govern all analytical work in the course.

Lesson 4 • Cost Concepts and Terminology

Introduces essential cost vocabulary used throughout the course. Precise terminology enables accurate analysis in all subsequent chapters.

Lesson 1 • Job Order Costing Systems

Covers cost accumulation for distinct, customized outputs using job cost sheets. Connects to strategic pricing by revealing true per-job profitability.

Lesson 2 • Process Costing Systems

Explains cost averaging across homogeneous units in continuous production. Students compute equivalent units and unit costs for multi-department flows.

Lesson 3 • Hybrid and Operation Costing

Addresses environments combining job and process characteristics. Students design hybrid systems matching cost accumulation to production reality.

Lesson 4 • Cost Classification for Decision Support

Demonstrates how cost classification choices affect managerial decisions. Students reclassify costs to match specific analytical purposes.

Lesson 1 • Activity-Based Management

Extends ABC data into operational improvement and strategic decisions. Students distinguish value-added from non-value-added activities and prioritise elimination.

Lesson 2 • ABC Implementation and Behavioural Issues

Addresses organisational resistance, data requirements, and maintenance costs of ABC. Students develop implementation plans that manage change effectively.

Lesson 3 • Time-Driven Activity-Based Costing

Introduces TDABC as a simplified, scalable alternative to traditional ABC. Students estimate time equations and capacity cost rates for complex operations.

Lesson 4 • Limitations of Traditional Overhead Allocation

Diagnoses cost distortions caused by volume-based overhead rates. Motivates the shift to activity-based costing by quantifying misallocation errors.

Lesson 1 • Strategic Pricing Frameworks

Surveys cost-plus, target, value-based, and competitive pricing methods. Students select pricing strategies aligned with market position and cost structure.

Lesson 2 • CVP Fundamentals and Break-Even Analysis

Establishes contribution margin logic and break-even computation for single products. Provides the analytical foundation for all pricing and mix decisions.

Lesson 3 • Target Costing and Cost Reduction

Applies target costing to close the gap between allowable cost and current cost. Students use value engineering to redesign products without sacrificing customer value.

Lesson 4 • Multi-Product CVP Analysis

Extends CVP to firms with multiple products using weighted-average contribution margins. Students analyse how sales mix shifts affect profitability and break-even.

Lesson 1 • Flexible Budgets and Performance Evaluation

Introduces flexible budgeting to separate volume effects from efficiency effects. Students compute flexible budget variances and interpret managerial performance.

Lesson 2 • Purpose and Types of Budgets

Explains the planning, coordination, and control functions of budgets. Students distinguish operating, financial, and capital budgets within the master budget.

Lesson 3 • Constructing the Operating Budget

Walks through sequential preparation of sales, production, and cost budgets. Students build an integrated operating budget from revenue forecasts to budgeted income.

Lesson 4 • Cash Budget and Financial Statements

Converts operating budgets into cash flow projections and pro forma statements. Students identify liquidity gaps and plan financing before they become crises.

Lesson 1 • Variance Investigation and Behavioural Effects

Develops decision rules for investigating variances and addresses gaming behaviours. Students design investigation policies that balance cost and informational value.

Lesson 2 • Overhead Variance Analysis

Separates fixed and variable overhead variances into spending, efficiency, and volume components. Students link overhead variances to capacity utilisation decisions.

Lesson 3 • Sales Variances and Revenue Analysis

Extends variance analysis to revenue by decomposing sales price and volume variances. Students assess market share and market size effects on revenue performance.

Lesson 4 • Setting and Maintaining Standard Costs

Explains how to develop attainable, ideal, and historical standards for materials, labour, and overhead. Accurate standards are the baseline for meaningful variance analysis.

Lesson 1 • Performance System Implementation

Addresses governance, data infrastructure, and change management for performance system rollout. Students develop implementation roadmaps that sustain measurement discipline.

Lesson 2 • Non-Financial and Sustainability Metrics

Incorporates quality, innovation, employee, and environmental metrics into performance systems. Students design scorecards that capture long-term value creation.

Lesson 3 • Limitations of Financial Metrics Alone

Diagnoses the strategic blind spots created by exclusive reliance on financial measures. Motivates the need for balanced, forward-looking performance frameworks.

Lesson 4 • Balanced Scorecard Design

Guides construction of a balanced scorecard across four perspectives linked by strategy maps. Students translate strategic objectives into measurable performance indicators.

Lesson 1 • Relevant Cost Analysis for Strategic Decisions

Applies relevant cost logic to make-or-buy, add-or-drop, and sell-or-process decisions. Students filter irrelevant costs to isolate the true financial impact of each choice.

Lesson 2 • Risk and Uncertainty in Capital Decisions

Introduces sensitivity analysis, scenario planning, and real options to handle investment uncertainty. Students quantify risk exposure and build contingency into capital plans.

Lesson 3 • Outsourcing, Offshoring, and Vertical Integration

Evaluates total cost of ownership and strategic risk in sourcing decisions. Students build decision models that incorporate hidden costs and supply chain resilience.

Lesson 4 • Capacity Management and Constraint Analysis

Applies theory of constraints to identify and exploit bottlenecks limiting throughput. Students optimise product mix and capacity investments using throughput accounting.