Sustainability Management and Accounting Flashcards
Why has management accounting evolved to include environmental concerns?
- Originally focused on manufacturing efficiency
- Increased awareness of sustainability issues
- Criticisms of traditional methods
- The need for more relevant data that includes environmental costs
What is Input/ Output analysis and its purpose in environmental accounting?
Input/ Output analysis tracks the flow of materials through a production process to ensure all inputs are accounted for in the outputs, minimizing waste and environmental impact.
How is ABC used in environmental management accounting?
ABC assigns costs to activities based on their consumption of resources, allowing firms to identify and reduce environmental costs by optimizing resource-intensive activities.
What is Life-Cycle Costing and how does it relate to environmental accounting?
Life-Cycle Costing assesses all costs associated with a product from creation to disposal, including environmental costs, to help companies make more sustainable decisions that reduce long-term financial and ecological impacts.
Why are environmental costs significant in modern management accounting?
Environmental costs are crucial as they help firms understand the financial implications of environmental impacts of their operations, leading to more sustainable practices and compliance with environmental regulations.
