Course Description:

Cost analysis and performance measurement is fundamentally an important process. In most cases, to measure performance, cost analysts begin by measuring resources consumed (cost items). Next, they match (assign) cost items to cost objects. Finally, they account for the prices paid (historical cost) to acquire cost items and adjust those prices to reflect economic reality. Based on real case studies, this 5-day course covers the fundamentals of costing in order to accumulate and assign cost elements to units produced or service rendered and finally evaluate the performance.

Course Goal:

To enhance the participants’ knowledge, skills and abilities necessary to understand how to analyze cost elements and measure performance.

Course Objectives:

By the end of this Course the participant will be able to:

1. Enhance cost awareness
2. Identify the meaning of cost, loss, and waste.
3. Distinguish between expense and expenditure, product and period costs, manufacturing and non-manufacturing, direct and indirect costs and fixed and variable costs.
4. Understand cost behavior and describe specific cost analysis techniques
5. Select the costing measurement system that works
6. Understand how to measure cost of quality
7. Describe specific performance measurement techniques
8. Select the systems of performance measurement that works
9. Broadening the management accounting knowledge
10. Enhance the ability to link cost to strategy to performance measurement
11. Use Information for Performance Measurement and Control
12. Understand how to use Balanced Scorecard as a strategic tool for Performance Measurement and Control
13. Understand how to transfer from cost to strategy to performance measurement
14. Apply Financial Performance tools in Oil and Gas Companies
15. Understand how to Improve Performance

Course Outline:

• Cost Terminology

1. Key Cost Concepts: Cost, Loss, and Waste.
2. Expense and Expenditure
3. Product and Period Costs (Inventoriable and Non-Inventoriable)
4. Manufacturing and Non-manufacturing
5. Direct and Indirect
6. Fixed and Variable
7. Cost Behavior and Cost-Volume-Profit / Break-Even analysis

• Cost of Quality
• Information for Performance Measurement and Control

1. Effort is not the same thing as Performance
2. What is Performance?
3. What Factors Influence Performance
4. Why Information and Why Performance Measurement?
5. Information as a Competitive Advantage
6. What Should be Measured and How Should it be Used?
7. Managerial Responsibilities
8. How Do Firms Choose What To Measure?
9. Technical Feasibility of Measuring
10. Cost of Measurement
11. Desired Level of Innovation and Control
12. Should Purpose Affect Measurement?

• Balanced Scorecard as a Strategic tool for Performance Measurement and Control

1. Financial Perspective
2. Financial Perspective
3. Customer Perspective
4. Internal Business Process Perspective
5. Learning & Growth Perspective

• Financial Performance tools in Oil and Gas Companies

1. Reserve Replacement Ratio
2. Reserve Life Ratio
3. Net Wells to Gross Wells Ratio
4. Average Reserves Per Well Ratio
5. Average Daily Production Per Well
6. Finding Costs Per BOE
7. Lifting Costs Per BOE
8. DD&A Per BOE
9. Value of Proved Reserve Additions Per BOE
10. Value Added Ratio

• Performance Improvement

1. How is PI Different from other Quality Approaches?
2. Performance Improvement Framework
3. PI Users Perceptions
4. How We Benefit from a Performance Improvement Process