Exam 15: Sustainability

The cost to install equipment to reduce the emissions of a coal-fired power plant would be categorized as what type of cost by an environmental management accounting system (EMA)?

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

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

A waste audit is best described by which of the following statements?

Traditional performance management systems can be adapted to include measures of environmental costs, savings, and liabilities. Revenue received from recycling scrap metal at a manufacturing plant is an example of a key performance indicator (KPI)classified under which perspective of the balanced scorecard?

When a company makes purchasing decisions based on how well the suppliers manage the social and environment impact of their operations, the company is practicing ___________________.

An organization faces many challenges when implementing an environmental accounting (EMA)system. Which of the following inherent challenges must an organization overcome because its technical staff and accounting staff are in two separate locations, using two separate information systems?

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 0.006 pounds by 15%, but will increase the overall cost of paper per pound from $1.21 per pound to $1.3 per pound. Beginning inventory for the year will be 260 pounds and desired ending inventory is 1700 pounds. Total production for the year is projected at 3,500,000 cups. If Common Paper implements the new system, what is the expected cost savings for paper purchased during the year? (Do not round any intermediary calculations. Round your final answer to the nearest dollar.)

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?

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 total amount of water consumed by an organization is an example of physical information that may be collected by an EMA.

A common definition of ________ is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.

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?

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

Large corporations that do not issue sustainability reports are now in the minority.

Materials costs of product outputs category is similar to indirect materials since it becomes part of the final product.

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?

All of the following are aspects of the subcategory "labor practices and decent work" except

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 $14,188, but will decrease variable cost per unit by $180. Rubber City expects to sell 770 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? (Round any intermediary calculations and your final answer to the nearest whole unit.)

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