Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN: 9781305970663
Author: Don R. Hansen, Maryanne M. Mowen
Publisher: Cengage Learning
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Chapter 14, Problem 23E
Coyle Pharmaceuticals produces two organic chemicals (Org AB and Org XY) used in the production of two of its most wide-selling anti-cancer drugs. The controller and environmental manager have identified the following environmental activities and costs associated with the two products:
Required:
- 1. Calculate the environmental cost per pound for each product. Which of the two products appears to cause the most degradation to the environment?
- 2. In which environmental category would you classify excessive use of materials and energy?
- 3. Suppose that the toxin releases cause health problems for those who live near the chemical plant. The costs, due to missed work and medical treatments, are estimated at $2,025,000 per year. How would assignment of these costs change the unit cost? Should they be assigned?
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Coyle Pharmaceuticals produces two chemicals (Chem AB, and Chem XY) used in the production of two of its most wide-selling anti-cancer drugs. Coyle Pharmaceuticals has recently received significant criticism from environmental groups, local residents, and the federal government concerning its environmental performance. The CEO of the company wants to know which product is the main source of the environmental problems. The Management Accountant has assembled the following data to help answer this question:
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Chem XY
Pounds of fertilizer produced
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Pounds of scrap recycled
80,000
20,000
Packaging materials (kilograms)
2,400,000
1,200,000
Energy usage (kilowatt hours)
800,000
400,000
Engineering hours (process design)
18,000
12,000
Pollution control (machine hours)
300,000
75,000
Pounds of solid residues treated
90,000
30,000
Inspection hours (environmental)
30,000
15,000
Cleanup…
Certain production equipment used by Dayton Mechanical has become obsolete relative to current technology. The company is considering whether it should keep or replace its existing equipment. To aid in this decision, the company’s controller gathered the following data: (See attached)
c. What is the total dollar amount of all relevant costs to the equipment replacement decision. $______
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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…
Chapter 14 Solutions
Cornerstones of Cost Management (Cornerstones Series)
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 - Evans Company had total sales of 3,000,000 for...Ch. 14 - Prob. 2CECh. 14 - Ross Company implemented a quality improvement...Ch. 14 - Nabors Company had actual quality costs for the...Ch. 14 - Verde Company reported operating costs of...Ch. 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 - Kang Company reported sales of 3,240,000 in 20x5....Ch. 14 - Gagnon Company reported the following sales and...Ch. 14 - Muskogee Company had sales of 60,000,000 in 20x1....Ch. 14 - Javier Company has sales of 8 million and quality...Ch. 14 - In 20x4, Tru-Delite Frozen Desserts, Inc.,...Ch. 14 - Prob. 17ECh. 14 - Prob. 18ECh. 14 - Achieving sustainable development will likely...Ch. 14 - Classify the following environmental activities as...Ch. 14 - At the end of 20x5, Bing Pharmaceuticals began to...Ch. 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 - Kathy Shorts, president of Oliver Company, was...Ch. 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 - Wayne Johnson, president of Banshee Company,...Ch. 14 - Recently, Ulrich Company received a report from an...Ch. 14 - In 20x5, Major Company initiated a full-scale,...Ch. 14 - Paper Products Division produces paper diapers,...Ch. 14 - In 2011, Milton Thayne, president of Carbondale...Ch. 14 - Iona Company, a large printing company, is in its...Ch. 14 - Prob. 40PCh. 14 - The following items are listed in an environmental...Ch. 14 - Refer to Problem 14.41. In the environmental...Ch. 14 - The following environmental cost reports for 20x3,...Ch. 14 - Refer to Problem 14.43. In 20x3, Jack Carter,...
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