Activity Costing Executive Seminar for Performance Accountability Course

Module 1: Getting Started

• Review the strategic role of cost management in public and private sectors
• Challenge common misconceptions about cost control and financial stewardship
• Understand managerial vs. financial costing and the value of credible measurement

Module 2: The Mechanics of Activity-Based Costing

• Differentiate between guessing, direct costing, and allocation
• Learn cost driver theory and application
• Explore cost objects, cost pools, and distribution methodologies

Module 3: Pitfalls in Designing ABC Approaches

• Identify common mistakes in cost driver selection and system design
• Understand the risks of cross-subsidization and over-precision
• Explore behavior-driven implications of cost measurement errors

Module 4: Other Allocation Considerations

• Apply Level of Effort (LOE) as a driver in service-oriented environments
• Explore random error vs. systematic bias in estimates
• Compare direct, step-down, and reciprocal allocation methods

Module 5: ABC’s Mission Benefits and Cost Benefit Analysis (CBA)

• Review case studies from FDA and Army cost-informed decisions
• Apply an 8-step process for CBA and cost estimation
• Integrate ABC into CBA for more strategic resource allocation

Module 6: Framework for Cost Measurement – Part 2

• Explore alternatives to budget compliance as cost control strategy
• Learn how productivity gains drive organizational capacity
• Discuss leadership’s role in driving cost-informed decision-making

Module 7: Role-Based Control and ABC Applications

• Implement role-based cost control systems within support/core structures
• Use ABC to reallocate overhead and motivate cost reductions
• Review practical examples from SPAWAR and NRaD

Module 8: Summary and Conclusions

• Compare organization-based, role-based, and output-based control systems
• Explore applications in the Bureau of Engraving and Printing
• Establish practices for sustaining a cost-managed organization