Cost Analysis for Strategic Decision Making Training Course

Duration 5 days 10 modules · 33 contact hours
Level Advanced Certificate on completion
Who attends Finance Managers, Management Accountants and others
Fee from USD 1,100 KSh 95,000 for Kenyan organisations
Where 52 cities + online See dates by city
Next start 9 Nov 2026 Course code SD-FM-087

Before you join: Participants should understand core management accounting concepts, including income statements, fixed and variable costs, contribution margin, budgets and basic spreadsheet calculations.

Dates & prices

Two start dates a month in every city, and live online on weekdays or weekends. Fees are per participant; classroom fees include tuition, materials, lunch and refreshments, and the certificate.

Suggest a date or city

Showing the next six months. Later dates, other cities and private deliveries for your team are available on request.

Course overview

Senior finance staff are often asked to explain why margins changed, whether a product or service should continue, how much capacity is needed, or which investment option creates value. These decisions can fail when reported accounting costs are treated as decision-relevant costs, overheads are allocated without regard to resource consumption, or financial models ignore constraints, uncertainty and strategic consequences. Sound cost analysis turns operational, commercial and financial data into a defensible basis for action.

This advanced course develops the methods used to support pricing, product mix, outsourcing, customer profitability, capacity and investment decisions. Participants distinguish relevant from irrelevant costs, model cost behaviour, design activity-based costing structures, and analyse contribution under scarce-resource constraints. They apply target costing, life-cycle costing, customer profitability analysis and transfer-pricing principles. The course also examines uncertainty through sensitivity analysis, scenario analysis and decision trees, then connects cost findings to strategic priorities, performance measures and management recommendations.

Instruction combines concise technical briefings with worked financial cases, group analysis and facilitated decision simulations. Cases reflect the choices faced by manufacturers, banks, public agencies, service businesses and project-based organisations. Participants build and test cost models, challenge assumptions, interpret results for decision makers and prepare recommendations that state financial effects, risks and implementation conditions. They leave with a reusable strategic cost-analysis toolkit containing model structures, decision checklists and a personal application plan for a current business issue.

What you will be able to do

  • Classify costs by traceability, behaviour, controllability and decision relevance
  • Build activity-based costing models using cost pools and resource drivers
  • Calculate contribution, break-even points and scarce-resource product-mix decisions
  • Prepare relevant-cost analyses for make-or-buy, shutdown and special-order decisions
  • Apply target costing and life-cycle costing to product and service decisions
  • Assess customer and channel profitability using activity-based customer costing
  • Evaluate uncertainty through sensitivity analysis, scenarios and decision trees
  • Present strategic cost recommendations supported by financial evidence and assumptions

Benefits of attending

For you

  • Make defensible recommendations on pricing, sourcing and capacity decisions
  • Identify hidden cross-subsidies in products, services and customer accounts
  • Challenge cost allocations and margin reports with evidence
  • Build clearer financial cases for senior management approval
  • Apply uncertainty analysis rather than relying on single-point estimates

For your organisation

  • Improved pricing and product decisions based on actual resource consumption
  • Earlier identification of unprofitable customers, channels and service offerings
  • Better make-or-buy decisions through relevant-cost and capacity analysis
  • More disciplined capital and improvement proposals with explicit assumptions
  • Stronger alignment between operational measures and strategic financial priorities

Course modules

10 modules over 5 days

Participants can classify costs correctly and identify information relevant to a specific decision.

  • Cost objects, cost drivers, and cost pools defined for decisions
  • Traceability rules separate direct costs from indirect resource consumption
  • Classify fixed, variable, mixed, step, sunk, and opportunity costs
  • Relevant-range assumptions tested against capacity and volume evidence
  • Cost behaviour estimated using account analysis and high-low method
  • Managerial cost terminology reconciled with financial reporting classifications

Participants can design and interpret an activity-based costing model for complex overheads.

  • Traditional overhead allocation methods tested for cross-subsidy risk
  • Activity-based costing links resource costs to operational activities
  • Select cost drivers using causality, measurability, and behavioural considerations
  • Resource consumption rates calculated from cost pools and driver volumes
  • Time-driven activity-based costing estimates capacity cost rates
  • Unused capacity costs separated from product and customer profitability
  • ABC results interpreted without treating allocated costs as automatic decisions

Participants can analyse contribution and select profitable actions under capacity constraints.

  • Contribution margin calculated by product, service, customer, and channel
  • Cost-volume-profit assumptions tested before using break-even calculations
  • Break-even volume and margin of safety derived from operating data
  • Multi-product break-even analysis incorporates sales mix and contribution ratios
  • Constraint analysis ranks products by contribution per scarce resource
  • Linear programming logic supports product-mix decisions under multiple constraints
  • Operating leverage interpreted through fixed-cost exposure and demand volatility

Participants can prepare relevant-cost analyses for short-term operational and commercial decisions.

  • Incremental cash flows distinguish decision effects from historical accounting costs
  • Make-or-buy analysis includes avoidable fixed costs and supplier risks
  • Special-order pricing tested against capacity, contribution, and market consequences
  • Shutdown decisions separate unavoidable costs from avoidable cash savings
  • Further-processing choices compare incremental revenue with incremental processing costs
  • Opportunity costs quantified where constrained capacity has alternative uses
  • Qualitative factors documented alongside relevant-cost calculations and recommendations

Participants can connect market price, required profit and allowable cost in pricing decisions.

  • Price floors distinguish short-term contribution needs from long-term sustainability
  • Value-based pricing considers customer economics, alternatives, and willingness to pay
  • Target costing derives allowable cost from market price and profit
  • Value engineering identifies cost reductions without damaging required functionality
  • Cost-plus pricing limitations examined under competition and differentiated offerings
  • Price-volume trade-offs modelled using demand assumptions and contribution effects
  • Tender pricing incorporates risk allowances, capacity effects, and contract terms

Participants can evaluate costs across the full economic life of products, assets and contracts.

  • Life-cycle costing captures design, acquisition, operation, support, and disposal
  • Design-stage cost commitments examined before production and service delivery
  • Total cost of ownership compares supplier proposals beyond purchase price
  • Quality costs classified as prevention, appraisal, internal failure, external failure
  • Environmental cost drivers incorporated where energy, waste, and compliance matter
  • Whole-life cost profiles support asset replacement and maintenance choices
  • Discounted cash flow converts multi-year cost streams into comparable values

Participants can analyse the profitability of customers, channels and market segments accurately.

  • Customer profitability analysis assigns sales, service, logistics, and support costs
  • Activity-based customer costing identifies high-service and low-margin accounts
  • Channel profitability separates distribution costs from product gross margin
  • Cost-to-serve analysis traces order patterns, returns, and service demands
  • Customer lifetime value incorporates retention, acquisition, and future contribution
  • Profitability bridges explain margin changes by price, volume, mix, and cost
  • Account actions distinguish price correction, service redesign, and relationship exit

Participants can evaluate investment proposals using cash-flow-based appraisal and strategic criteria.

  • Relevant project cash flows exclude financing charges and sunk expenditure
  • Net present value discounts forecast cash flows at appropriate rates
  • Internal rate of return limitations compared with net present value
  • Payback period used alongside value, liquidity, and risk considerations
  • Equivalent annual cost compares alternatives with unequal operating lives
  • Post-investment review compares approved assumptions with realised financial outcomes
  • Strategic fit assessed alongside quantified benefits and implementation dependencies

Participants can test cost-based recommendations against uncertainty, risk and behavioural effects.

  • Sensitivity analysis tests critical assumptions one variable at a time
  • Scenario analysis combines demand, price, cost, and capacity changes
  • Decision trees value alternatives with uncertain events and probabilities
  • Expected monetary value supports choices under measurable uncertainty
  • Monte Carlo simulation concepts identify distributions rather than single estimates
  • Data-quality checks expose incomplete, outdated, biased, and inconsistent inputs
  • Behavioural consequences considered before changing targets, prices, or allocations

Participants can communicate strategic cost recommendations clearly and plan their application at work.

  • Decision-focused reports state recommendation, financial impact, assumptions, and risks
  • Waterfall charts explain changes in profit, cost, volume, and mix
  • Variance analysis separates planning, price, efficiency, and volume effects
  • Balanced scorecard measures connect cost outcomes with operational drivers
  • Management challenge questions test model logic, evidence, and recommendation strength
  • Implementation plans define owners, data requirements, milestones, and review points
  • Personal application priorities selected from current pricing, cost, or investment decisions

Exercises and examples are adapted to each cohort's sectors and roles.

What you take back to work

  1. Relevant-cost decision analysis template
  2. Activity-based costing model structure
  3. Contribution and capacity decision worksheet
  4. Target-costing and life-cycle cost checklist
  5. Customer profitability analysis template
  6. Strategic cost recommendation and application plan

Who should attend

  • Finance Managers — need stronger evidence for operational and strategic recommendations
  • Management Accountants — need advanced methods for profitability and resource-allocation analysis
  • Financial Planning Analysts — need to connect cost models with planning decisions
  • Commercial Finance Business Partners — need to challenge pricing, customer and product economics
  • Operations Managers — need to understand capacity, process and sourcing cost trade-offs
  • Internal Audit and Performance Managers — need to assess the quality of management cost information

Skills and tools covered

Relevant cost analysisActivity-based costingProfitability modellingStrategic pricing analysisInvestment appraisalManagement decision support

Tools and standards

Activity-Based Costing, Time-Driven Activity-Based Costing, Cost-Volume-Profit Analysis, Net Present Value

How the course runs

Training methodology

The course uses short instructor briefings to establish methods, followed by worked calculations and sector-based cases. Participants analyse cost data, construct spreadsheet-ready model logic, compare decision alternatives and defend recommendations in small groups. Simulations address pricing, capacity constraints, sourcing and investment choices where the reported cost is not automatically the relevant cost. Facilitated discussion focuses on assumptions, data quality, behavioural consequences and communication with decision makers. Each participant develops an application plan linked to a live decision from their role.

Requirements and prerequisites

Participants should understand core management accounting concepts, including income statements, fixed and variable costs, contribution margin, budgets and basic spreadsheet calculations. Experience preparing management reports, budgets, forecasts, product costing or business cases is expected. Participants should be comfortable interpreting financial data and discussing operational drivers with non-finance colleagues. The course does not require prior experience with activity-based costing, advanced statistics, programming or specialist modelling software. A laptop with spreadsheet software is useful for live online delivery and recommended for classroom participants.

A typical training day

08:30 – 10:30First session
10:30 – 10:45Refreshment break
10:45 – 12:30Second session
12:30 – 13:30Lunch and networking
13:30 – 15:00Third session
15:00 – 15:15Refreshment break
15:15 – 16:30Workshop and daily review

Live online deliveries follow the same structure in East Africa Time, with shorter screen blocks and longer breaks.

What the fee includes

  • Instruction by a practitioner facilitator
  • Full course workbook and materials
  • Exercise files, templates and case studies
  • Refreshments and lunch on classroom deliveries
  • Certificate of completion
  • Post-course application plan

Frequently asked questions

Participants need a working understanding of management accounting, financial statements, budgets and contribution margin. The course builds advanced decision-analysis skills; it does not reteach basic accounting principles.

Bring a laptop with spreadsheet software where possible, plus examples of current cost, pricing, sourcing or investment questions from your role. Confidential data is not required; participants can use anonymised figures.

It is designed for experienced finance, commercial finance, planning, operations and performance professionals who influence resource-allocation decisions. It is particularly useful for staff moving from reporting roles into business partnering or decision support.

Standard courses often focus on costing mechanics, budgeting and variance reporting. This course concentrates on selecting the right costs for strategic choices, testing assumptions and presenting recommendations under uncertainty.

Participants can use the templates for pricing reviews, make-or-buy assessments, customer profitability studies, capacity decisions and investment proposals. The final module helps them identify one current decision and define the data, stakeholders and next steps needed.

Training runs from 08:30 to 16:30 each day, providing about 6.5 contact hours daily. Time is divided among technical instruction, worked cases, group analysis, simulations, discussion and application planning.

Questions about this course?

Ask about dates, fees, group bookings or running it for your team. Our training team replies by email.

Ask on WhatsApp info@skillsetdevelopment.com

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