Official Course Description: MCCCD Approval: 07/22/08
MGT283 19942-20086	LEC	2 Credit(s)	2 Period(s)
Activity-Based Cost Management
Activity accounting approach to cost management. Includes a step-by-step process of how to break down an organization into distinct activities and to measure the effectiveness of each activity from a cost and performance standpoint. Prerequisites: MGT102 or permission of Department or Division.

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MCCCD Official Course Competencies:
MGT283   19942-20086	Activity-Based Cost Management

1.	Define the role of activity costing in achieving enterprise excellence. (I)
2.	Interpret specific changes in business environments that lead to the development of activity cost management. (II)
3.	Describe future manufacturing trends and their impact on management reporting. (II)
4.	Define the key components of an activity accounting and cost management system. (III-VI)
5.	Create a basis for introducing specific changes to facilitate cost reduction and performance improvement. (III-VI)
6.	Explain the role of variable and fixed costs in the decision-making process. (VII)
7.	List the specific six-steps for calculating product cost. (VIII)
8.	Explain the importance of cost precision and cost significance in management decision-making. (IX, X)

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MCCCD Official Course Outline:
MGT283   19942-20086	Activity-Based Cost Management

I. Activity accounting and enterprise excellence A. Foundation B. Traditional cost systems C. Activity and traditional cost contrast D. Implementation E. Motivation F. Behavioral change G. Achieve enterprise excellence H. Getting started II. Changing business environment A. Decline of traditional manufacturing B. Automation C. Future D. Cost management implications III. Activities, activity accounting, and cost management A. Activity hierarchy B. Activity overview C. Business process overview D. Components - activity accounting system E. Components - cost management system IV. Advantages of activity accounting A. Actions B. Improve product cost accuracy C. Drive cost D. Facilitate evaluation of alternatives E. Focus comporate stategy F. Complement continuous improvement G. Compatible with total quality management H. Cost-effective I. Easily understood J. Link planning and control K. Integrate financial and nonfinancial performance L. Highlight interdependencies M. Facilitate life-cycle management N. Improve decision support V. Activity analysis A. Overview B. Aggregation and decomposition C. What is analyzed D. Seven-step activity analysis method VI. Industrial empire activities A. Marketing and sales B. Manufacturing and quality control C. Research and development and engineering D. Finance and administration E. Logistics and field support VII. Activity cost A. Behavior patterns B. Decision making C. Establishing a relationship D. Considerations E. Activity measures VIII. Calculating an activity cost A. Six-step activity cost calculating process B. Applications IX. Tracing activity cost A. Traditional reporting objectives B. Activity accounting uses C. Reporting objectives D. Traceability criteria E. Cost precision F. Cost significance X. Activity product cost and traditional approach A. Product cost uses B. Traditional approach 1. Shortcomings 2. Distortion C. Activity product cost 1. Approach 2. Special considerations

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