1. Processes or Costs? – That is the question Tomasz M. Zieliński President of the board , ABC Akademia Sp. z o.o.

6. Cost view of organization Mindset shift – Process view of costs Customer Service example

7. Mindset shift – Process view of costs Customer Service example Process view of organization

8. Cost view of organization Mindset shift – Process view of costs Customer Service example Process view of organization

9. FRUTTO S.A. Producer of beverages Cost view of organization Mindset shift – Process view of costs Customer example Process view of organization

10. FRUTTO S.A. Producer of beverages Cost view of organization Mindset shift – Process view of costs Customer example Process view of organization

11. KERAMIK S.A. Producer of ceramics Cost view of organization Mindset shift – Process view of costs Product example Process view of organization

12. KERAMIK S.A. Producer of ceramics Cost view of organization Mindset shift – Process view of costs Product example Process view of organization

17. 1 2 3 4 5 7 10 11 6 8 12 9 Costing Continuum // Levels of Maturity Level # EXPENSE TRACKING, COST REPORTING and CONSUMPTIONS RATES DEMAND DRIVEN PLANNIN G with CAPACITY SENSITIVITY Blind Process Visibillity Output Visibillity Improved Output Information/ Approximate Accuracy Improved Treatment of Indeirect Costs Customer Demand Sensitive Unused Capacity Aware Pull Activity-based Resource Planning Time-driven ABC Resource Consumption Accounting Simulation bookkeeping process & lean accounting Direct costs who (3) and with (4) support costs to output groups Standard costing to individual outputs; Project accl; Job order costing Push Activity-based costing (ABC); Product costs Level 6 with Channel & customer profitability Reporting; Cost to serve Unused capacity costs (estimeled) Push RCA Resource Consump-tion Accounting (ABRP); Forecast driver quantities X unit consumption rates; Driver based budgeting GPK Grenzplan-kosten- rechnung (TDABC); Forecast driver quantities X time consumtion rates; Direct cost focus; Repetivitive work conditions RCA: Level 9 with proportional costing at direct and support depts. Unlimate in consumtion rates Copyright © July 2009 by the International Federation of Accountants (IFAC).

18. 1 2 3 4 5 7 10 11 6 8 12 9 Costing Continuum // Levels of Maturity Blind Process Visibillity Output Visibillity Improved Output Information/ Approximate Accuracy Improved Treatment of Indeirect Costs Customer Demand Sensitive Unused Capacity Aware Pull Activity-based Resource Planning Time-driven ABC Resource Consumption Accounting Simulation bookkeeping process & lean accounting Direct costs who (3) and with (4) support costs to output groups Standard costing to individual outputs; Project accl; Job order costing Push Activity-based costing (ABC); Product costs Level 6 with Channel & customer profitability Reporting; Cost to serve Unused capacity costs (estimeled) Push RCA Resource Consump-tion Accounting (ABRP); Forecast driver quantities X unit consumption rates; Driver based budgeting GPK Grenzplan-kosten- rechnung (TDABC); Forecast driver quantities X time consumtion rates; Direct cost focus; Repetivitive work conditions RCA: Level 9 with proportional costing at direct and support depts. Unlimate in consumtion rates Copyright © July 2009 by the International Federation of Accountants (IFAC). Source: Research by ABC Akademia Sp. z o.o. 2011 POLAND 2011

20. „ Vacuum cleaning ” activity costing

21. Cause and effect costing I Resource pools / cost centers Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

22. Cause and effect costing II Resource costing Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

23. Cause and effect costing III Activity costing Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

24. Cause and effect costing IV Product / Customer costing Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

25. Cause and effect costing V Product / Customer full cost costing Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

26. Cause and effect costing I - V Resource / Activity / Product / Customer costing Set-up Production line Pressing, heating, assembly, packaging Schedule production Quality control Picking orders Processing orders Transportation Visiting customers [1] [2] Production line 3 Forklift trucks Sales represenat. Electricity IT system Office space Customer service staff Production planning staff Warehouse building Production line 1 Transport Production line 2 Production maintenance staff RESOURCES COSTING ACTIVITIES COSTING PRODUCTS AND CUSTOMERS COSTING PRODUCT PROFITABILITY CUSTOMER PROFITABILITY [5] [5] [6] [1] [2] Repairing Cleaning office [4] [4] [4] [4] [4] Product Segment Product Brand Customer Segment Customer Region

32. Thank You!!! Processes or Costs? – That is the question Tomasz M. Zieliński President of the board, ABC Akademia Sp. z o.o.