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Gail B. Wright
Professor Emeritus of Accounting
Bryant University
MANAGEMENT
ACCOUNTING
8th EDITION
BY
17 ENVIRONMENTAL COST
1MANAGEMENT
INTRODUCTION
LEARNING
OBJECTIVES
LEARNING GOALS
LEARNING OBJECTIVES
1. Discuss the importance of measuring
environmental costs.
2. Explain how environmental costs are
assigned to products & processes.
3. Describe the life-cycle cost assessment
model.
4. Compare & contrast activity- & strategicbased environmental control.
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Questions to Think About
LEARNING OBJECTIVE
Discuss the
importance of
measuring
environmental costs.
LO 1
Why is it important to
measure environmental
costs?
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LO 1
ECOEFFICIENCY: Definition
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LO 1
SUSTAINABLE DEVELOPMENT:
Definition
LO 1
ECOEFFICIENCY
Many things
provide causes &
incentives that
foster ecoefficiency.
EXHIBIT 17-1
13
LO 1
ENVIRONMENTAL QUALITY
COST MODEL
Looks at costs and their impact for damage
done to the environment. In addition to
direct costs, there are costs to preventing
environmental degradation.
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LO 1
ENVIRONMENTAL DETECTION
COSTS
Are costs to determine compliance with
appropriate environmental standards
including:
Regulatory government laws
Voluntary standards (ISO 14001)
Managements environmental policies
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LO 1
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LO 1
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LO 1
ENVIRONMENTAL COST
REPORT
External
failure
costs are
the largest
costs.
EXHIBIT 17-3
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LO 1
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LO 1
ENVIRONMENTAL FINANCIAL
STATEMENT
Investments in
environmental
benefits
partially offset
environmental
costs.
EXHIBIT 17-4
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LEARNING OBJECTIVE
Explain how
environmental costs
are assigned to
products & processes.
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LO 1
ASSIGNING ENVIRONMENTAL
COSTS
Product costs
Packaging
Products themselves
Process costs
Solid, liquid, gaseous residues
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LO 2
ENVIRONMENTAL COSTING:
Definition
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LO 2
LO 2
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LEARNING OBJECTIVE
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LO 3
LIFE-CYCLE ASSESSMENT:
Definition
Identifies environmental
consequences of a product
through its entire life cycle &
searches for improvements.
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LO 3
EXHIBIT 17-6
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LO 3
ASSESSMENT STAGES
3 formal stages
Inventory analysis
Types, quantities inputs needed
Environmental releases
Impact analysis
Effects of competing designs
Relative ranking of effects
Improvement analysis
Objective: to reduce environmental impacts
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LEARNING OBJECTIVE
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LO 4
ENVIRONMENTAL
PERSPECTIVE
5 objectives for environmental perspective
Minimize use of raw or virgin materials
Minimize use of hazardous materials
Minimize energy requirements for production, use
of product
Minimize release of solid, liquid, gaseous residues
Maximize opportunities to recycle
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LO 4
OBJECTIVES &
PERSPECTIVES
Companies need
measures to
evaluate whether
objectives of the
environmental
perspective are
being met.
EXHIBIT 17-8
32
LO 4
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LO 4
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LO 4
EXHIBIT 17-10
35
LO 4
EXHIBIT 17-11
36
LO 4
EXHIBIT 17-12
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CHAPTER 17
THE END
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