Different management accounting techniques can be used to account for environmental costs.
One of these techniques involves analysing costs under three distinct categories: material, system, and delivery and
disposal.
What is this technique known as?
A Activity-based costing
B Life-cycle costing
C Input-output analysis
D Flow cost accounting
Which of the following statements regarding environmental cost accounting are true?
(1) The majority of environmental costs are already captured within a typical organisation’s accounting system. The difficulty lies in identifying them
(2) Input/output analysis divides material flows within an organisation into three categories: material flows; system flows; and delivery and disposal flows
(3) One of the cost categories used in environmental activity-based costing is environment-driven costs which is used for costs which can be directly traced to a cost centre
(4) Environmental life-cycle costing enables environmental costs from the design stage of the product right through to decommissioning at the end of its life to be considered
A. (1), (2) and (4)
B. (1) and (4) only
C. (1), (3) and (4)
D. (2) and (3) only
When activity-based costing is used for environmental accounting, which statement is correct for environment-related costs and environment-driven costs?
A. Environment-related costs can be attributed to joint cost centres and environment-driven costs cannot be
B. Environment-driven costs can be attributed to joint cost centres and environment-related costs cannot be
C. Both environment-related costs and environment-driven costs can be attributed to joint cost centres
D. Neither environment-related costs nor environment-driven costs can be attributed to joint cost centres
The following are types of management accounting techniques:
(i) Flow cost accounting
(ii) Input/output analysis
(iii) Life-cycle costing
(iv) Activity based costing
Which of the above techniques could be used by a company to account for its environmental costs?
A. (i) only
B. (i) and (ii) only
C. (i), (ii) and (iii) only
D. All of the above