EBK CORNERSTONES OF COST MANAGEMENT
3rd Edition
ISBN: 9781305147102
Author: MOWEN
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Textbook Question
Chapter 14, Problem 20E
Classify the following environmental activities as prevention costs, detection costs, internal failure costs, or external failure costs. For external failure costs, classify the costs as societal or private. Also, label those activities that are compatible with sustainable development (SD).
- 1. A company takes actions to reduce the amount of material in its packages.
- 2. After the activated carbon’s useful life, a soft-drink producer returns this material used for purifying water for its beverages to the supplier. The supplier reactivates the carbon for a second use in nonfood applications. As a consequence, many tons of material are prevented from entering landfills.
- 3. An evaporator system is installed to treat wastewater and collect usable solids for other uses.
- 4. The inks used to print snack packages (for chips) contain heavy metals.
- 5. Processes are inspected to ensure compliance with environmental standards.
- 6. Delivery boxes are used five times and then recycled. This prevents 112 million pounds of cardboard from entering landfills and saves 2 million trees per year.
- 7. Scrubber equipment is installed to ensure that air emissions are less than the level permitted by law.
- 8. Local residents are incurring medical costs from illnesses caused by air pollution from automobile exhaust pollution.
- 9. As part of implementing an environmental perspective for the Balanced Scorecard, environmental performance measures are developed.
- 10. Because of liquid and solid residues being discharged into a local lake, the lake is no longer fit for swimming, fishing, and other recreational activities.
- 11. To reduce energy consumption, magnetic ballasts are replaced with electronic ballasts, and more efficient light bulbs and lighting sensors are installed. As a result, 2.3 million kilowatt-hours of electricity are saved per year.
- 12. Due to a legal settlement, a chemicals company must spend $20,000,000 to clean up contaminated soil.
- 13. A soft-drink company uses the following practice: In all bottling plants, packages damaged during filling are collected and recycled (glass, plastic, and aluminum).
- 14. Products are inspected to ensure that the gaseous emissions produced during operation follow legal and company guidelines.
- 15. Operating pollution control equipment incurs costs.
- 16. An internal audit is conducted to verify that environmental policies are being followed.
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The following items are listed in an environmental financial statement (issued as part of an environmental progress report):
Environmental benefits (savings, income, and cost avoidance):
Ozone-depleting substances cost reductions
Hazardous waste disposal cost reductions
Hazardous waste material cost reductions
Nonhazardous waste disposal cost reductions
Nonhazardous waste material cost reductions
Recycling income
Energy conservation cost savings
Packaging cost reductions
Environmental costs:
Corporate-level administrative costs
Auditor fees
Environmental engineering
Facility professionals and programs
Packaging professionals and programs for packaging reductions
Pollution controls: Operations and maintenance
Pollution controls: Depreciation
Attorney fees for cleanup claims, and notices of violations (NOVs)
Settlements of government claims
Waste disposal
Environmental taxes for packaging
Remediation/Cleanup: On-site
Remediation/Cleanup: Off-site
1. Classify each item in the…
The following items are listed in an environmental financial statement (issued as part of an environmental progress report):
Environmental benefits (savings, income, and cost avoidance):
Ozone-depleting substances cost reductions
Hazardous waste disposal cost reductions
Hazardous waste material cost reductions
Nonhazardous waste disposal cost reductions
Nonhazardous waste material cost reductions
Recycling income
Energy conservation cost savings
Packaging cost reductions
Environmental costs:
Corporate-level administrative costs
Auditor fees
Environmental engineering
Facility professionals and programs
Packaging professionals and programs for packaging reductions
Pollution controls: Operations and maintenance
Pollution controls: Depreciation
Attorney fees for cleanup claims, and notices of violations (NOVs)
Settlements of government claims
Waste disposal
Environmental taxes for packaging
Remediation/Cleanup: On-site
Remediation/Cleanup: Off-site
In the environmental benefits section…
Clarke, Inc. manufactures door panels. Suppose Clarke, Inc. is considering spending the following amounts on a new total quality management (TQM) program:
View the spending amounts.
Clarke, Inc. expects the new program would save costs through the following:
View the savings amounts.
Requirements
1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.
2. Should Clarke, Inc. implement the new quality program? Give your reason.
Requirement 1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.
Type of Cost
Strength-testing one item from each batch of panels
Training employees in TQM
Training suppliers in TQM
Identifying suppliers who commit to on-time delivery of perfect-quality materials
Lost profits from lost sales due to disappointed customers
Rework and spoilage
Inspection of raw materials
Warranty costs
Savings
Avoid lost profits from lost sales due to…
Chapter 14 Solutions
EBK CORNERSTONES OF COST MANAGEMENT
Ch. 14 - What is the difference between quality of design...Ch. 14 - Why are quality costs the costs of doing things...Ch. 14 - Prob. 3DQCh. 14 - Describe the Taguchi quality loss function, and...Ch. 14 - Identify and discuss the four kinds of quality...Ch. 14 - Explain why external failure costs can be more...Ch. 14 - Prob. 7DQCh. 14 - Prob. 8DQCh. 14 - Describe the three types of quality performance...Ch. 14 - Prob. 10DQ
Ch. 14 - If a firms annual sales are 200 million, what...Ch. 14 - Explain why it is important for a manager to...Ch. 14 - Prob. 13DQCh. 14 - Explain why the Accounting Department should be...Ch. 14 - Prob. 15DQCh. 14 - What is ecoefficiency?Ch. 14 - Prob. 17DQCh. 14 - Prob. 18DQCh. 14 - Prob. 19DQCh. 14 - What are the four categories of environmental...Ch. 14 - Prob. 21DQCh. 14 - What does full environmental costing mean? Full...Ch. 14 - What information is communicated by the unit...Ch. 14 - Prob. 1CECh. 14 - Prob. 2CECh. 14 - Prob. 3CECh. 14 - Prob. 4CECh. 14 - Prob. 5CECh. 14 - Pinter Company had the following environmental...Ch. 14 - Rachel Boyce, president of a company that...Ch. 14 - Quality attributes such as performance and...Ch. 14 - Stahman, Inc., estimates its hidden external...Ch. 14 - Prob. 10ECh. 14 - Abernathy, Inc., produces two different generators...Ch. 14 - Prob. 12ECh. 14 - Gagnon Company reported the following sales and...Ch. 14 - Prob. 14ECh. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - Prob. 16ECh. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - Prob. 21ECh. 14 - Prob. 22ECh. 14 - Coyle Pharmaceuticals produces two organic...Ch. 14 - Prob. 24ECh. 14 - Which of the following quality costs is an...Ch. 14 - Which of the following would be a hidden quality...Ch. 14 - Using the Taguchi quality loss function, an...Ch. 14 - Environmental costs are those costs incurred...Ch. 14 - Two products, Product A and Product B, are...Ch. 14 - Prob. 30PCh. 14 - Panguitch Company manufactures a component for...Ch. 14 - Gaston Company manufactures furniture. One of its...Ch. 14 - Classify the following quality costs as...Ch. 14 - Prob. 34PCh. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - Prob. 36PCh. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Prob. 42PCh. 14 - Prob. 43PCh. 14 - Prob. 44P
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