This practical course focuses on product costing methodologies and profitability analysis techniques used in manufacturing and service organizations. Participants will learn various costing systems including job order costing, process costing, and hybrid approaches, along with detailed profitability analysis for products, services, and customers. The program covers cost accumulation, allocation methods, and profitability reporting that supports strategic decision-making. Through hands-on exercises and industry examples, attendees will develop the expertise to implement robust costing systems and conduct meaningful profitability analysis.
Product Costing and Profitability Analysis
Financial Management and Accounting
October 25, 2025
Introduction
Objectives
Key learning objectives for this course include:
- Design and implement product costing systems for different manufacturing environments
- Apply job order costing for custom products and services
- Implement process costing for mass production operations
- Calculate and analyze product profitability
- Conduct customer and channel profitability analysis
- Use costing information for pricing decisions
- Apply overhead allocation methods appropriately
- Develop product line profitability reporting
- Use costing data for product portfolio decisions
Target Audience
- Product Cost Accountants
- Manufacturing Accountants
- Cost Analysts
- Product Managers
- Pricing Analysts
- Operations Managers
- Financial Controllers in manufacturing
- Supply Chain Finance Professionals
Methodology
- Job costing simulation exercises
- Process costing calculations
- Overhead allocation workshops
- Profitability analysis case studies
- Pricing decision scenarios
- Product portfolio analysis
- Individual costing system projects
Personal Impact
- Enhanced product costing technical skills
- Improved profitability analysis capabilities
- Stronger decision support abilities
- Increased confidence in costing systems
- Better understanding of manufacturing economics
- Professional growth in cost accounting
Organizational Impact
- Improved product costing accuracy
- Enhanced profitability measurement and reporting
- Better pricing and product mix decisions
- Increased cost control and reduction
- Stronger inventory valuation accuracy
- Improved operational efficiency insights
Course Outline
Product Costing Fundamentals
Costing Concepts- Product cost components
- Direct vs. indirect costs
- Manufacturing overhead concepts
- Cost of goods sold calculation
- Costing system selection criteria
- Chart of accounts for costing
- Cost center structure design
- Cost accumulation methods
Job Order Costing
Job Costing System- Job costing applications and characteristics
- Job cost sheet preparation
- Material and labor cost tracking
- Overhead application methods
- Custom manufacturing costing
- Service job costing
- Construction project costing
- Job costing for professional services
Process Costing
Process Costing System- Process costing applications
- Equivalent units calculation
- Weighted average method
- FIFO method for process costing
- Cost of production report
- Normal and abnormal spoilage
- Joint product costing
- By-product accounting
Overhead Allocation
Traditional Allocation- Plant-wide overhead rates
- Departmental overhead rates
- Allocation base selection
- Practical capacity considerations
- Activity-based costing for overhead
- Cost driver analysis
- Capacity cost management
- Overhead variance analysis
Profitability Analysis
Product Profitability- Gross profit analysis by product
- Contribution margin analysis
- Product line profitability
- Product portfolio analysis
- Customer cost-to-serve analysis
- Customer lifetime value
- Customer segment profitability
- Channel profitability analysis
Decision Support
Pricing Decisions- Cost-plus pricing methods
- Target costing for pricing
- Product mix decisions
- Make-or-buy analysis
- Product costing for inventory valuation
- Variance analysis for cost control
- Benchmarking product costs
- Continuous improvement using cost data
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