Cost management and control seminar
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Cost Management and Control Seminar. suppliers of cement aggregates (crushed stone, sand and gravel) ready-mix concrete and asphalt Related services. The Holcim Group and Its Costing System. 70 countries on all continents, 90,000 employees 2006 Revenues: $ 21,825 M.

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Cost Management and Control Seminar

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Cost Management and Control Seminar

suppliers of

cement

aggregates (crushed stone, sand and gravel)

ready-mix concrete and asphalt

Related services.

The Holcim Group and Its Costing System

70 countries on all continents,

90,000 employees

2006 Revenues: $ 21,825 M

Group B31 Aldo Gallo Cáceres - Félix Morán Subía - Thiago Macitelli


+ 1050%

+ 480%

Emergent Markets

Established Markets

Holcim Group Figures and Value Chain

1980 Employees 18734

2006 Employees 90000

1980 Revenues $ 2,209 M

2006 Revenues: $ 21,825 M


Code: 100

RM Extraction

Code: 500

Cement Grinding

Code: 300

RM Preparation 2

Code: 400

Clinker Production

Code: 600

Dispatching (no main)

Code: 200

RM Preparation 1

Pre-process Cost Centers:

Correctives.

Gypsum and additives.

Mineral Components.

Power Generation.

Auxiliary Cost Centers:

Alternative Raw Materials.

Alternative Fuels.

Main Cost Center Classification

Cement Production Process

Main Cost Accounts

Corporate

Manufacturing

Corporate

Logistics

Marketing

& Sales

Administration


Costing System

Process Costing

Major Guides of the Costing System:

Employee`s input:

  • Cost Centers.

  • Accounts codification.

  • General required description of the movement.

    The accounting software (SAP):

  • It has an internal assignation process, accounts are already internally tagged as: variable cash cost, Fixed cash cost, and others related.

    Key Issue: (Employee's Main Role for the success of the Costing System)

    Right Assignation of accounts and cost centers.


Cost Drivers

Main Information Behind

  • Cost center’s impacts on total cost

  • Relevant costs

  • Main opportunities for cost reductions.


How to Choose a Costing System

  • An accounting system established to monitor a company's costs, providing management with information on operations and performance.

  • Process costing

    • High volume

    • Are identical

    • identical amount of direct labor

    • Repetitive operations

  • Job Order costing

    • typically low volume

    • Tend to be unique (custom order)

    • different amount of direct material

    • different amount of direct labor


Decision making planning and control process

Cost drivers

e.g. Process improvement, change raw materials, etc.

Performance indicators

Adjust the plans

From: Drury (2004). Management and cost accounting. 6th edition. ISBN 978-1-84480-703-1


Decisions Making Process Using Costing System


Decisions Making Process Using Costing System


Possible decisions

  • Process improvement (e.g. reduce the number of stops by increasing preventive maintenance)

  • Change fuel supplier to reduce costs

  • After selecting and implementing the decisions they performance has to be monitored in the same way

  • The new performance indicators could be compared with the previous period

  • If necessary, corrective action plans could be taken


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