16-1 HANSEN & MOWEN Cost Management ACCOUNTING AND CONTROL.
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Transcript of 16-1 HANSEN & MOWEN Cost Management ACCOUNTING AND CONTROL.
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HANSEN & MOWENHANSEN & MOWEN
Cost ManagementCost ManagementACCOUNTING AND CONTROLACCOUNTING AND CONTROL
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Environmental Costs: Environmental Costs: Measurement and ControlMeasurement and Control
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Ecoefficiency essentially maintains that organizations
can produce more useful goods and services while simultaneously reducing negative environmental
impacts, resource consumption, and costs.
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
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The Ecoefficiency ParadigmThe Ecoefficiency ParadigmThe Ecoefficiency ParadigmThe Ecoefficiency Paradigm
(1) Reduce the consumption of resources
(2) Reduce the environmental impact
(3) Increase product value
(4) Reduce environmental liability
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
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Ecoefficiency RelationshipsEcoefficiency RelationshipsEcoefficiency RelationshipsEcoefficiency Relationships
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
continued
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Ecoefficiency RelationshipsEcoefficiency RelationshipsEcoefficiency RelationshipsEcoefficiency Relationships
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
continued
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Environmental costs are costs that are incurred because poor environmental quality exists or may exist.
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
Environmental costs can be classified in four categories: prevention costs, detection costs, internal failure costs, and external failure costs.
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Classification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by Activity
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
Prevention Activities
Evaluating and selecting suppliersEvaluating and selecting pollution control equipmentDesigning processesDesigning productsCarrying out environmental studiesAuditing environmental risksDeveloping environmental management systemsRecycling productsObtaining ISO 14001 certification
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Classification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by Activity
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
Detection Activities
Auditing environmental activitiesInspecting products and processesDeveloping environmental performance measuresTesting for contaminationVerifying supplier environmental performanceMeasuring contamination levels
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Classification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by Activity
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
Internal Failure Activities
Operating pollution control equipmentTreating and disposing of toxic wasteMaintaining pollution equipmentLicensing facilities for producingcontaminantsRecycling scrap
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Classification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by Activity
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
External Failure Activities
Cleaning up a polluted lakeCleaning up oil spillsCleaning up contaminated soilSettling personal injury claims(environmentally related)Restoring land to natural stateLosing sales due to poor environmentalreputation
continued
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Classification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by ActivityClassification of Environmental Costs by Activity
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
External Failure Activities
Receiving medical care due to polluted airLosing employment because of contaminationLosing a lake for recreational use Damaging ecosystems from solid waste disposal
Societal costs
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Environmental Cost ReportEnvironmental Cost ReportEnvironmental Cost ReportEnvironmental Cost Report
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
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Relative Distribution: Environmental CostsRelative Distribution: Environmental CostsRelative Distribution: Environmental CostsRelative Distribution: Environmental Costs
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
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Environmental Financial StatementEnvironmental Financial StatementEnvironmental Financial StatementEnvironmental Financial Statement
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
continued
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Environmental Financial StatementEnvironmental Financial StatementEnvironmental Financial StatementEnvironmental Financial Statement
Defining, Measuring, and Controlling Defining, Measuring, and Controlling Environmental Costs Environmental Costs 1
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Unit-Based Environmental Cost Assignments—
Environmental costs are separated into a cost pool
Costs are assigned to individual products using unit-level drivers
Best for a homogeneous product setting
Environmental CostingEnvironmental Costing 2
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ABC Environmental CostingABC Environmental CostingABC Environmental CostingABC Environmental Costing
Environmental CostingEnvironmental Costing 2
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Life cycle assessment identifies the environmental consequences of a product through its entire life cycle and then searches for opportunities to obtain environmental improvements.
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
16-20Controlled by Customer
DisposalDisposalRecyclingRecyclingProduct Use
and Maintenance
Product Use and
Maintenance
PackagingPackaging
Controlled by Supplier
Controlled byManufacturer
ProductionProduction
Product-Life Product-Life Cycle StagesCycle StagesProduct-Life Product-Life Cycle StagesCycle Stages
RawMaterials
RawMaterials
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Assessment Stages
(1) Inventory analysis
(2) Impact analysis
(3) Improvement analysis
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Inventory analysis specifies the types and quantities of materials and energy inputs needed and the resulting environmental releases in the form of solid, liquid, and gaseous residues.
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Inventory AnalysisInventory AnalysisInventory AnalysisInventory Analysis
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
continued
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Inventory AnalysisInventory AnalysisInventory AnalysisInventory Analysis
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Impact analysis assesses the environmental effects of competing designs and provides a relative ranking of those effects.
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Cost assessment determines the financial consequences of the environmental impacts identified in the inventory and improvement steps of life-cycle assessment.
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Improvement analysis has the objective of reducing the environmental impacts revealed by the inventory and impact steps.
Life-Cycle Cost AssessmentLife-Cycle Cost Assessment 3
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Five core objectives for the environmental perspectives:
1) Minimize hazardous materials 2) Minimize raw or virgin materials3) Minimize energy requirements 4) Minimize the release of residues5) Maximize opportunities to recycle
4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
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Objectives and Measures: Environmental PerspectiveObjectives and Measures: Environmental PerspectiveObjectives and Measures: Environmental PerspectiveObjectives and Measures: Environmental Perspective
4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
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4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
Non-Value-Added Cost Trends: Environmental CostsNon-Value-Added Cost Trends: Environmental CostsNon-Value-Added Cost Trends: Environmental CostsNon-Value-Added Cost Trends: Environmental Costs
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4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
Environmental Cost Trend GraphEnvironmental Cost Trend GraphEnvironmental Cost Trend GraphEnvironmental Cost Trend Graph
16-322004 2005 2006 2007
Pounds emitted
CFC Emissions
Bar Graph for Trend AnalysisBar Graph for Trend AnalysisBar Graph for Trend AnalysisBar Graph for Trend Analysis
4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
0
20
40
60
80
100
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Hazardous Waste Management Pie ChartHazardous Waste Management Pie ChartHazardous Waste Management Pie ChartHazardous Waste Management Pie Chart
4Strategic-Based Environmental Strategic-Based Environmental Responsibility AccountingResponsibility Accounting
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End of End of Chapter 16Chapter 16