Exam 15: Sustainability

At Lowry Company, the production staff does not share information with the environmental staff. This scenario is an example of which type of EMA implementation challenge?

________ may include shareholders, bankers, special interest groups, employees, policy makers, customers, suppliers, or community members.

Government grants and tax credits increase the costs of implementing sustainability measures.

The cost of wages of workers needed to comply with new EPA standards is included in the Payroll account for all employees. This scenario is an example of which type of EMA implementation challenge?

Traditional performance management systems can be adapted to include measures of environmental costs, savings, and liabilities. The percentage of employees participating in a diabetes walk is an example of a key performance indicator (KPI)classified under which perspective of the balanced scorecard?

Simon Manufacturing is conducting preliminary research into installing a geothermal heat pump to heat and cool its factories and offices. The initial cost of installing the new system is $245,000; however, Simon will save $35,000 annually on its heating and cooling costs. The system has an expected life of 15 years. What is the payback period, in years, for the geothermal heat pump?

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 per house. 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. What is the net cost to repurpose the building materials?

There are several reasons an organization might pursue sustainable initiatives. "A national hotel chain instituted a paper-saving program that reduced the cost of office paper purchased by 20% annually." This situation is an example of which type of reason to implement sustainable initiatives?

Currently, the SEC does not require publicly-held corporations to disclose the costs related to remediation of contaminated sites.

The "triple bottom line" reports on three factors: profits, people, and planet.

Which of the following organizations conducts an annual information Request survey in which environmental impact information is disclosed?

Physical information has not been a traditional component of managerial accounting systems.

There are several reasons an organization might pursue sustainable initiatives. "Due to rising costs, a manufacturing firm has reduced the amount of plastic used in each of its products, which helps to keep down the cost of raw materials (plastics). The drop in plastic usage also reduces the amount of plastic sent to the landfill after consumer use." This situation is an example of which type of reason to implement sustainable initiatives?

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 reduction in the quantity of paper that will need to be purchased?

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

Due to the relative infancy of environmental management accounting, the tools utilized are continuously being developed and improved.

People's Public Power is an electric utility company. The new CEO is interested in implementing new projects that will not only benefit the environment, but will also benefit the company through cost savings. One of the proposed projects is to offer a paperless, online billing solution for its customers in Green Township. Preliminary market research indicates that participation in the paperless option will be between 20 - 30% of customers. Total costs for the paperless system are projected to be $100,000 per quarter, which are comprised solely of fixed costs for IT personnel and computer hardware. The CEO has asked you to perform an analysis of the proposed paperless billing system. Historical costs for the current paper-based system are as follows: Requirements: a. Using the historical costs calculate the variable costs per bill under the current system. b. The company projects that next quarter 650,000 bills will be mailed to customers. What is the projected cost savings if the maximum number, 30%, of customers choose the paperless system? c. What is the projected cost savings if the minimum number, 20%, of customers choose the paperless system?

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 Rubber City's operating income increase (decrease)if they purchase the new CNC machine?

There are several reasons an organization might pursue sustainable initiatives. "An automobile manufacturer has committed to being the market leader in fuel economy with every new vehicle developed." This situation is an example of which type of reason to implement sustainable initiatives?

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 annual cost of stamping waste, including both the materials cost and the disposal cost?