Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
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Textbook Question
Chapter 15, Problem 15.27BE
Sustainability and
Smigel Industries manufactures plastic bottles for the food industry. On average, Smigel pays $73 per ton for its plastics. Smigel’s waste-disposal company has increased its waste-disposal charge to $56 per ton for solid and inert waste. The company generates a total of 500 tons of waste per month.
Smigel’s managers have been evaluating the production processes for areas to cut waste. In the process of making plastic bottles, a certain amount of machine “drool’’ occurs. Machine drool is the excess plastic that drips off the machine between molds. In the past, Smigel has discarded the machine drool. In an average month. 180 tons of machine drool are generated.
Management has arrived at three possible courses of action for the machine drool issue:
- 1. Do nothing and pay the increased waste-disposal charge.
- 2. Sell the machine drool waste to a local recycler for $11 per ton.
- 3. Reengineer the production process at an annual cost of $70,000. This change in the production process would reduce the amount of machine drool generated by 60% each month. The remaining machine drool would then be sold to a local recycler for $11 per ton.
Requirements
- 1. What is the annual cost of the machine drool currently? Include both the original plastics cost and the waste-disposal cost.
- 2. How much would the company save per year (net) if the machine drool were to be sold to the local recycler?
- 3. How much would the company save per year (net) if the production process were to be reengineered?
- 4. What do you think the company should do? Explain your rationale.
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Chapter 15 Solutions
Managerial Accounting (5th Edition)
Ch. 15 - (Learning Objective 1) Which of the following is...Ch. 15 - (Learning Objective 1) Which of the following...Ch. 15 - Prob. 3QCCh. 15 - Prob. 4QCCh. 15 - (Learning Objective 2) What is the current status...Ch. 15 - (Learning Objective 2) Which of the following...Ch. 15 - Prob. 7QCCh. 15 - Prob. 8QCCh. 15 - Prob. 9QCCh. 15 - Prob. 10QC
Ch. 15 - Prob. 15.1SECh. 15 - Identify aspects within each G4 category on a GRI...Ch. 15 - Identify aspects within each G4 Social subcategory...Ch. 15 - Prob. 15.4SECh. 15 - Prob. 15.5SECh. 15 - Prob. 15.6SECh. 15 - Define key sustainability terms (Learning...Ch. 15 - Prob. 15.8SECh. 15 - Prob. 15.9AECh. 15 - Prob. 15.10AECh. 15 - Prob. 15.11AECh. 15 - Prob. 15.12AECh. 15 - Prob. 15.13AECh. 15 - Sustainability and cost behavior (Learning...Ch. 15 - Prob. 15.15AECh. 15 - Prob. 15.16AECh. 15 - Sustainability and budgeting (Learning Objective...Ch. 15 - Prob. 15.18AECh. 15 - Prob. 15.19AECh. 15 - Sustainability and capital investments (Learning...Ch. 15 - Sustainability and the statement of cash flows...Ch. 15 - Prob. 15.22AECh. 15 - Prob. 15.23BECh. 15 - Prob. 15.24BECh. 15 - Prob. 15.25BECh. 15 - Prob. 15.26BECh. 15 - Sustainability and process costing (Learning...Ch. 15 - Prob. 15.28BECh. 15 - Sustainability and CVP concepts (Learning...Ch. 15 - Prob. 15.30BECh. 15 - Prob. 15.31BECh. 15 - Prob. 15.32BECh. 15 - Prob. 15.33BECh. 15 - Sustainability and capital investments (Learning...Ch. 15 - Prob. 15.35BECh. 15 - Prob. 15.36BECh. 15 - Prob. 15.37APCh. 15 - Prob. 15.38APCh. 15 - Prob. 15.39BPCh. 15 - Prob. 15.40BPCh. 15 - Each year for the past six years, Caesars...Ch. 15 - Discussion Questions 1. Pressure to become more...Ch. 15 - Corporate Sustainability Reports Note: In the...Ch. 15 - Sustainability and investment choices...Ch. 15 - Ethics of internal sustainability reporting...Ch. 15 - FirstEnergy and its sustainability report...
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