Exam 15: Sustainability

Traditional performance management systems can be adapted to include measures of environmental costs,savings,and liabilities.The amount of electricity used by an oil refinery is an example of a key performance indicator (KPI)classified under which perspective of the balanced scorecard?

Integrating sustainable business practices may help to identify new revenue streams for an organization.

(Net present value table required)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 net present value (NPV)of the project,assuming a discount rate of 8%?

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?

Which of the following collects information from the world's largest companies each year and disseminates that information to institutional investors and other stakeholders?

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

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?

The managerial accountant at the Export Shoppe attended a meeting with the facilities manager to discuss the internal and external costs during the quarter.The facilities manager provided the managerial accountant with the following cost worksheet that highlights the internal and external costs during the period: The managerial accountant reported that the total environmental costs are 20% of all costs during the year.Calculate the total environmental costs at the Export Shoppe.

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

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)?

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

An EMA system only requires aggregated data to function effectively.

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?

When Doubletree Hotel in Oregon created a "green" floor,it saw decreased housekeeping costs,laundry costs,and personal consumables costs.This situation is an example of which type of reason to implement sustainable initiatives?

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?

Mr.Lite is an entrepreneur that builds and manages organic vegetables in the United States.Mr.Lite recently developed a sustainability strategy to build a large greenhouse and warehouse in a recessed area in North Carolina.The greenhouse is expected to produce organic vegetables and Mr.Lite can sell the organic vegetables to the state to feed homeless people at the local community centers in the state.This project is expected to generate a minimum of 100 full-time employees.The cost to build the new greenhouse is $10,000,000 and the food that is produced at the greenhouse is expected to generate $1,500,000 in payments from the state. Compute the payback period,in years.Should Mr.Lite build the new greenhouse? Is the strategy to build the new greenhouse an effective sustainability strategy? Why or why not?

The city of Pittsburgh,Pennsylvania conducted a life-cycle assessment (LCA)and 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 require disposal at a special landfill at a total 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 Company 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?

Financial accounting information focuses on historical transactions and rarely includes future-oriented costs.For an EMA system to be effective in helping management make good decisions,it will need to include

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?

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?