Several years ago, Ingrid Krause wanted some international experience and applied for a transfer to her company's soap division, which is located south of Warsaw, Poland. The soap division manufactures hand soap for use in a large number of settings, from hospitals to luxury hotels. Ingrid was awarded the transfer to the soap division and was assigned to the accounting department. She is responsible for overseeing the cost- ing and profitability analysis of the various soaps and soap-making processes. During her tenure in the soap division, there were numerous changes in the number of soaps manufactured and the processes to make the different soaps. Consequently, Ingrid's position required her to consider changes in the accounting system to reflect the changes in the soap division's business. For several decades, the company's soap-making process required a large labour force that manufac- tured and packaged the soap mostly by hand. Local economic changes meant that the labour force that the factory required was not as available as it had been in the past. As a result, the division was experiencing significant employee turnover, which often resulted in increased expenses related to training new hires, slower processing time, and more soap being rejected during inspections because of quality concerns. To address the issues related to the lack of labour availability, the division's management decided three years ago that automation was the way to go. Consequently, over the last three years, the soap-making processes have changed with the implementation of automation. The automation of the soap-making process has allowed for a much larger variety of soap and packag- ing, a reduced direct labour force and direct labour costs, and a higher level of traceability of costs to the various soaps because of technological improvements. Soaps made for industrial applications require dif- ferent ingredients, less time in processing, less time in finishing, and less time in and cheaper packaging than do soaps made for the hotel industry. The costs of materials and packaging are directly traceable to the various types of soaps through new software that uses bar codes and counters to trace direct material costs to the various soaps directly