Lesson 6B

Question 1

3. classify and describe the types of environmental costs, including costs for materials, waste and emission control, prevention, research and development, and intangible costs

Answer 1

material costs of production outputs - purchase costs of natural reesources like lumber converted into products

Material costs of non-product otputs - costs of water and energy that become non-product output like air emissions and waste. Eg water used as coolant for plant

Water & emission control costs - costs for handling, trating & disposing of all forms of waste & emissions, like solid wastes, waste water, hazardous waste and air emissions

Prevention costs - incurred to prevent enviro costs. Eg costs of monitoring water output for contaminants

R & D costs - costs of R&D projects related to enviro issues. Eg running a lab to develop biodegradable products

Intangible costs - include costs of future liabilities, regulations, productivity, company image, and stakeholder relations. Eg cost of future lawsuit filed for infringement of environmental regulations.

Question 2

6. describe balanced scorecard measures for environmental objectives.

Answer 2

MEASURE - DESCRIPTION

Waste - amount of waste in production process, compared to an established goal

Air emissions - amount of air emissions in production process, compared to an established goal

Compliance - degree of compliance with environmental regulations

Green materials - percentage of materials used in production classified as green or eco friendly

Energy use - amount of energy used in production process, compared to an established goal

Accidents - number of accidents related to environmental issues

Recycling - percentage of recycled waste, compared to total waste in production process

Costs of clean up and remediation - overall costs of clean up and remediation, compared to a budgeted
amount

Reputation - survey of environmental reputation

Question 3

7. describe the challenges of implementing EMA practices

Answer 3

• Communications issues
• Hidden costs
• aggregated accounting info and archaic info systems
• historical orientation of accounting
• undeveloped field