Maurice Tutor

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    Argosy University/ Phoniex University/
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Category > Accounting Posted 22 Jul 2017 My Price 11.00

ENVIRONMENTAL COST CONTROL

ASSIGNING ENVIRONMENTAL COSTS, LIFE-CYCLE COST ASSESSMENT, ENVIRONMENTAL COST CONTROL

Searle Company produces two types of fertilizers: Rapidfeed and Timefeed. Searle has recently received significant criticism from environmental groups, local residents, and the federal government concerning its environmental performance. John Taylor, president of Searle, wants to know how the company’s environmental activities affect the cost of each product. He believes that the main source of the environmental problems lies with Rapidfeed, but he would like some evidence to support (or refute) this belief. The controller has assembled the following data to help answer this question:

 

Rapidfeed

Timefeed

Pounds of fertilizer produced

3,000,000

6,000,000

Engineering hours (process design)

4,500

13,500

Pounds of solid residues treated

90,000

30,000

Inspection hours (environmental)

30,000

15,000

Cleanup hours (local lake)

24,000

6,000

Additionally, the following environmental activity costs were reported:

Designing process

$ 450,000

Treating residues

1,800,000

Inspecting processes

360,000

Cleaning up lake

600,000

Required:

1. Calculate the environmental cost per pound of fertilizer for each product.

2. Based on the calculations in Requirement 1, which product appears to be the most environmentally harmful?

3. Would life-cycle cost assessment provide stronger evidence for the environmental suitability of each product? Explain.

4. Explain how a strategic-based responsibility accounting system can be used to help improve Searle’s performance.

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 09:07 PM My Price 11.00

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