Exam 15: Sustainability

Which of the following items does not represent physical information in environmental management accounting system?

An organization faces many challenges when implementing an environmental accounting (EMA)system. Which of the following inherent challenges must an organization overcome when it finds that its traditional accounting system does not track information regarding lost sales due to environmental regulation?

In a traditional accounting system, many indirect costs are assigned to overhead because they are difficult to trace to a product or process. Consequently, many environmental costs may be concealed in the overhead account. This is an example of which type of EMA implementation challenge?

The categories of costs collected by an EMA system are similar to the costs collected by traditional accounting systems.

Environmental sustainability should only be the concern of large multinational manufacturing corporations.

Which of the following items represents monetary information in an environmental management accounting system?

The city of Pittsburgh, Pennsylvania is reviewing proposals for the demolition of historic, but dilapidated, homes in its "Old East End" neighborhood. The homes, many dating back 150 years, contain lead paint, lead pipes, and asbestos insulation that must be taken to a special landfill at a cost of $50,000. A second option for the city is to reclaim the old woodwork, and bricks of the historic homes and repurpose the materials for use in new construction. This Old Crib Deconstruction submitted the lowest bid of $450,000 to properly dismantle the old homes. Construction Junction, which specializes in the sale of reclaimed building materials, has offered to purchase the materials for $375,000. Which of the following is a qualitative factor that Pittsburgh should consider in its analysis?

Alexander Industries, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Alexander is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $500,000 and would provide a net cost savings of $57,000 per year. The turbine will have a life of 25 years. If Alexander assigns a discount rate of 10% to this project, what is the net present value (NPV)of the wind turbine?

Rubber City Cycles manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists. Rubber City has found a CNC (computer numerical control)machine that will significantly reduce manufacturing waste while improving the quality of the frames. The new CNC machine will increase annual fixed costs by $13,750, but will decrease variable cost per unit by $150. Rubber City expects to sell 750 frames next year. Annual data for the current system are as follows: By what amount will the breakeven point in dollars increase (decrease)if Rubber City purchases the new CNC machine?

Materials flow accounting (MFA)reconciles physical output with all physical inputs.

Traditional performance management systems can be adapted to include measures of environmental costs, savings, and liabilities. The number of local, organic products available at a grocery store is an example of a key performance indicator (KPI)classified under which perspective of the balanced scorecard?

The environmental staff and technical and production staff of a corporation are located in two different offices, in two different cities. This scenario is an example of which type of EMA implementation challenge?

R-Cubed manufactures custom playground equipment from recycled plastics for city school districts. The school districts are required to use a certain percentage of recycled materials to comply to its state grants. As a result, R-Cubed tracks both virgin (non-recycled)and recycled materials used to manufacture its playground equipment. R-Cubed uses a predetermined manufacturing overhead rate of $7.00 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Stow City Schools: Calculate the percentage of recycled-content used in the Stow City Schools job (using pounds).

The cost of monitoring pollutants in the wastewater discharged from a manufacturing plant would be categorized as what type of cost by an environmental management accounting system (EMA)?

Sustainability considers not only the needs of the present generation, but also the needs of future generations.

Common Paper Supply produces paper cups for a national chain of coffee shops. Twenty-five percent of the paper used to produce the cups comes from post-consumer (recycled)paper. This satisfies the demands of the national coffee chain, which, for public relations reasons, requires a certain percentage of recycled content. Common Paper has developed a new method that will allow it to increase the percentage of post-consumer material per cup, while reducing the total paper needed per cup. This is a selling feature for the coffee chain and also reduces Common Paper's costs. The proposed method will reduce the total quantity of paper required per cup of .004 pounds by 15%, but will increase the overall cost of paper per pound from $1.20 per pound to $1.30 per pound. The new method also requires a one-time charge of $9,000 for re-tooling. Beginning inventory for the year will be 240 pounds and desired ending inventory is 1,200 pounds. Total production for the year is projected at 3,000,000 cups. If Common Paper implements the new system, what is the expected cost savings for paper purchased during the year?

Alexander Industries, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Alexander is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $500,000 and would provide a net cost savings of $57,000 per year. The turbine will have a life of 25 years. What is the payback period, in years, for the wind turbine?

A ________ is a measure of the total emissions of carbon dioxide and other greenhouse gases.

The costs associated with hazardous materials transportation are combined with other overhead costs in Horning Corporation's current accounting system. This scenario is an example of which type of EMA implementation challenge?

There are several reasons an organization might pursue sustainable initiatives. "Increasing pressure from customers has pushed a utility company to maintain average rates for electricity that are lower than the national average." This situation is an example of which type of reason to implement sustainable initiatives?