Discus Environmental Management Accounting

Discus Environmental Management Accounting
a What are the total estimated annual savings and cost avoidance for Baxter
International from environmental improvements in 2005?
b Are these savings driven by commercial or environmental management
considerations? Discuss.
3. Use of the term ‘economic cost’ may be contrasted with use of the term
‘accounting cost’.The term ‘cost’ is used in different contexts (and by different
individuals) with different meanings. It is therefore useful to distinguish the
accountant’s use of the term from the economist’s use
a What is the difference between an accountant’s cost and an economist’s
cost?
b How do financial accounting costs and management accounting costs
differ?
c Do accountants and economists have different views of environmental
cost?
4. How do full-cost accounting and full-cost pricing differ? Are they related?
Discus Environmental Management Accounting
5. External and internal costs:
a How do external and internal environmental costs differ? Provide three
examples of an external, and four examples of an internal, environmental
cost. In your examples of internal environmental costs include examples
of one direct, one indirect, one contingent and one intangible environmental cost.
b Are the following contingent costs internal or external: natural resource
damages; personal injury damages; economic loss damages?
6. What are opportunity costs? Why are they important to managers? What is the
opportunity cost of not investing in environmental protection? Provide an
example to support your answer.
7. Compare and contrast the following two statements. Are they concerned with
achieving eco-efficiency, eco-effectiveness or both?
A Businesses should sack the unproductive kilowatt-hours, tonnes and litres
rather than their workforce. This would happen much faster if we taxed
labour less and resource use correspondingly more.
A The purpose of management accounting information is not accuracy for
its own sake but to influence managers towards an organisation’s goals. By
using cost allocation schemes to penalise poor environmental practices an
organisation can encourage environmentally benign behaviour.