Table of Contents

Executive Summary 1

1. Introduction 3

2. Vision: Full Cost of Products and Services 10

3. Benefits of Knowing Full Costs 21

4. Full-cost Maturity Model 30

5. Level 0: Traditional Budgeting 33

6. Level 1: Transparency 35

7. Level 2: Fair Allocations 38

8. Level 3: Demand Management 40

9. Level 4: Accuracy 44

10. Level 5: Rates 49

11. Full Cost Versus Activity-based Costing 53

12. Utilizing FMM 56

APPENDIX 1: Benefits of Knowing Full Costs: Departmental 60

APPENDIX 2: Benefits of Knowing Full Costs: Enterprisewide 64

APPENDIX 3: Mechanics by Level 68

APPENDIX 4: Integrated Planning, Budgeting, and Rate-setting Process 84