AKMEN Ch 17 - Hansen Mowen

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    PowerPointPowerPoint Presentation byPresentation by

    Gail B. WrightGail B. WrightProfessor Emeritus of AccountingProfessor Emeritus of Accounting

    Bryant UniversityBryant University

     © Copyright !!" #homson $outh%Western& a part of #he

    #homson Corporation. #homson& the $tar 'ogo& an(

    $outh%Western are tra(emar)s use( herein un(er license.

    MANAGEMENT

    ACCOUNTING

    8th EDITION

    BY

    HANSEN & MOWEN

    * +,#-/UC#+,

    *" E,0+-,1E,#A' C$#1A,AGE1E,#

    STUDENT EDITION

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    1. Discuss the importance of measuring

    environmental costs.

    2. Explain how environmental costs areassigned to products & processes.

    3. Describe the life-cycle cost assessment

    model.

    . !ompare & contrast activity- & strategic-

     based environmental control.

    LEARNING OBJECTIVES 

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    "hy is it important to

    measure environmentalcosts#

    Awareness of environenta! "osts

    is i#ortant $e"a%se

    environenta! re%!ations &fines have in"rease'(

    $% 1

    fines

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    E,0+-,1E,#A' 2UA'+#3

    C$# 1/E'

    $oos at costs and their impact for damage

    done to the environment. 'n addition todirect costs( there are costs to preventing

    environmental degradation.

    $% 1

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    E,0+-,1E,#A' /E#EC#+,

    C$#$

    )re costs to determine compliance with

    appropriate environmental standards

    including*+egulatory government laws

    ,oluntary standards '% 1//10

    anagements environmental policies

    $% 1

    Manaeent)s environenta! #o!i"ies

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    "hat are environmental

    external failure costs#

    Environenta! e*terna! fai!%re

    "osts are "osts of a"tivities

    #erfore' after 'is"harin

    "ontainants & waste into the

    environent(

    $% 1

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    "hat information does an

    environmental cost report provide#

    Environenta! "ost re#orts revea!

    +, the i#a"t of environenta!

    "osts on fir #rofita$i!it- & .,

    re!ative ao%nts e*#en'e' in

    ea"h "ateor-(

    $% 1

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    !an environmental failure

    costs be reduced#

    Yes/ Investin ore in #revention 

    & 'ete"tion a"tivities wi!!

    re'%"e environenta! fai!%re

    "osts(

    $% 1

    #revention

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    E,0+-,1E,#A' C$#+,G4

    /efinition

    ull environmental costingassigns both private & societal

    costs to products. 4rivate costs

    are caused by internal processes.

    $% 2

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    5-1U'A4 Ca(mium E6ample

    Costs are assigned proportionately when

    multiple products are produced.

    $% 2

    E*terna! fai!%re "ost0

    1 Tota! fai!%re "ost 2 Units #ro'%"e'1 3+456555 7 .56555 1 3(45 #er %nit3(45 #er %nit

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    '+5E%C3C'E A$$E$$1E,#4

    /efinition

    'dentifies environmentalconse5uences of a product

    through its entire life cycle &

    searches for improvements.

    $% 3

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    A$$E$$1E,# $#AGE$

    3 formal stages'nventory analysis6ypes( 5uantities inputs needed

    Environmental releases

    'mpact analysisEffects of competing designs

    +elative raning of effects'mprovement analysis%b7ective* to reduce environmental impacts

    $% 3

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    E,0+-,1E,#A'

    PE-$PEC#+0E8 ob7ectives for environmental perspectiveinimi9e use of raw or virgin materials

    inimi9e use of ha9ardous materialsinimi9e energy re5uirements for production( use

    of product

    inimi9e release of solid( li5uid( gaseous residues

    aximi9e opportunities to recycle

    $%

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    )re environmental activities

    non-value-added#

    Be"a%se environenta! #o!!%tion

    is e9%iva!ent to e"onoi"

    ineffi"ien"-6 a!! fai!%re a"tivities

    are non:va!%e:a''e'(

    $%

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    E,0+-,1E,#A' C$# #-E,/

    G-AP7

    $%

    E87+B+#E87+B+# *"%*!*"%*!

    !osts as a percentage of sales

    trend downward

    over time.9

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    BA- G-AP7 5- #-E,/$

    $%

    E87+B+#E87+B+# *"%***"%**

    Emissions trenddownward over

    time.

    9

    %

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    7A:A-/U$ WA$#E P+E C7A-#

    $%

    E87+B+#E87+B+# *"%**"%*

    How 'o #ie"harts 'iffer

    fro other

    ra#hs in the

    inforation

    the- #rovi'e;

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    THE ENDTHE END

    CHA