Exam 15: Sustainability

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 0.004 pounds by 15%, but will increase the overall cost of paper per pound from $1.25per pound to $1.3 per pound. Beginning inventory for the year will be 240 pounds and desired ending inventory is 1200 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?

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?

For maximum effectiveness sustainable strategies are often implemented at which stage of an organization's value chain?

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 sustainability is the primary concern of which of the following types of organizations?

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?

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?

The system used for the identification, collection, analysis, and use of monetary and physical information is known as?

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 require special disposal at a special landfill at a cost of $55,000. The city conducted a life-cycle assessment (LCA)and discovered that the city could reclaim the old woodwork, bricks of the historic homes, and repurpose the materials to use in a new construction project. The Old Crib Deconstruction Company submitted the lowest bid of $460,000 to properly dismantle the old homes. Construction Junction, which specializes in the sale of reclaimed building materials, has offered to purchase the materials for $345,000. What is the net cost to repurpose the building materials?

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 with 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 $7.40 per direct labor hour. Here is a summary of the materials and labor used on a recent job for Stow City Schools: Calculate the total cost of the Stow City job.

Another name used to refer to sustainability reporting is

The role of accounting in sustainability is limited to mandatory external reporting.

Lester 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 $265,000; however, Lester will save $65,000 annually on its heating and cooling costs. The system has an expected life of 35 years. What is the payback period, in years, for the geothermal heat pump?

An oil company received poor publicity after an oil spill in Lake Erie. The costs 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?

All of the following are aspects of the subcategory "human rights" 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 $117,850, but will decrease variable cost per unit by $190. Rubber City expects to sell 650 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?

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?

EPA stands for ___________ and is the regulatory agency that is charged with writing, implementing, and enforcing environmental laws passed by Congress.

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?

In order to provide managers with environmental information, accountants will need to rethink their traditional views on what constitutes a "cost" and do which of the following?