Environmental Factors (2) Flashcards
What are externalised costs?
Those for which wider society has to “pay” at least an element (global warming)
WHat are internalised costs/
Impact is contained within the organisation
What is input/outflow analysis?
What comes in must go out. Material inflows are recorded and balanced with outflows
What does input/outflow analysis of a business account for?
Difference between material input and material output and focus on environmental costs
What is flow cost accounting?
Material flows through an organisation are divided into material, system and delivery, disposal
What is the aim of flow cost accounting?
To reduce the quantity of materials there by saving costs
How are environmental costs treated under activity based costing?
Grouped together into environmental cost pools, and each pool would be associated with an environmental cost driver
individual products that passed through the most polluting processes (ABC)
Would therefore absorb more environmental costs than cleaner or more “green” products
What does activity based costing lead to?
Increased awareness of how environmental costs behave
Better prodjuct pricing
Better production decisions
What are environment related costs?
Costs that can be attributed to a cost centre such as a waste treatment centre
What are environmental driven costs?
Costs that are caused by events in the environment but usually hidden in general overheads, such as electricity costs
Environmental costs and life cycle costing?
Environmental costs are considered from design stage of a new product right up to end of life costs (e.g. decomissioning)
Consideration of future disposal or remediation costs of the design stage?
May influence the design of the product itself, saving on future costs
