Exam 15: Sustainability

Gluck Metal Works stamps sheet metal into blanks that are used in a variety of consumer products. The average cost for sheet metal is $75 per ton. Gluck's waste disposal company charges $50 per ton to dispose of manufacturing waste. The stamping process currently employed by Gluck generates an average of 120 tons of waste per month. Gluck has developed a new system that would increase the efficiency of its stamping process. The new system has an annual cost of $45,000, but would reduce stamping waste by 50%, the remaining waste would be sold to a recycler for $30 per ton. What is the net savings if Gluck implements this new system?

When it comes to developing an EMA system, there are few reference tools available for environmental management accountants; therefore, organizations are still working to discover what information they need and how it can be reported in an accurate, timely and relevant manner. This scenario is an example of which type of EMA implementation challenge?

Which of the following items do not represent monetary information in an environmental management accounting system?

Which of the following items is most likely to be found on an environmental management accounting report?

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 units increase (decrease)if Rubber City purchases the new CNC machine?

The cost of water used to cool steel beams at a steel mill would be categorized as what type of cost by an environmental management accounting system (EMA)?

Traditional performance management systems can be adapted to include measures of environmental costs, savings, and liabilities. The number of training seminars related to sustainability offered by a company is an example of a key performance indicator (KPI)classified under which perspective of the balanced scorecard?

The quantity and cost of purchasing hazardous materials is included in the Purchases account for all materials. This scenario is an example of which type of EMA implementation challenge?

An organization faces many challenges when implementing an environmental accounting (EMA)system. Which of the following inherent challenges is an accountant facing when he is having difficulty finding literature regarding "best practices" for environmental accounting?

An EMA system only requires aggregated data to function effectively.

There are several reasons an organization might pursue sustainable initiatives. "A legislative act requires retailers to take back old batteries and electronic devices for recycling or reuse." This situation is an example of which type of reason to implement sustainable initiatives?

All of the following represent monetary information in an environmental management accounting system except

All of the following are challenges an organization may face when implementing an EMA system except

An oil company received poor publicity after an oil spill in Lake Erie. The cost of the future lost sales resulting from the bad publicity are not included in the results of operations provided to management even though the loss in sales was substantial. This scenario is an example of which type of EMA implementation challenge?

The cost of fabric to produce reusable grocery bags would be categorized as what type of cost by an environmental management accounting system (EMA)?

Environmental management accounting (EMA)utilizes three types of information for internal decision making.

An organization faces many challenges when implementing an environmental accounting (EMA)system. Which of the following inherent challenges must an organization overcome when the costs associated with hazardous materials disposal are combined with other overhead costs in its accounting system?

Gluck Metal Works stamps sheet metal into blanks that are used in a variety of consumer products. The average cost for sheet metal is $75 per ton. Gluck's waste disposal company charges $50 per ton to dispose of manufacturing waste. The stamping process currently employed by Gluck generates an average of 120 tons of waste per month. What is the net amount Gluck would save per year if stamping waste could be sold to a recycler for $30 per ton?

An EMA system must make visible the environmental costs hidden in overhead by a traditional accounting system.

Which of the following is a reason an organization would pursue sustainability?