Reference no: EM13939797
CLASSIFICATION OF ENVIRONMENTAL COSTS
Consider the following independent environmental activities:
a. A company takes actions to reduce the amount of material in its packages.
b. After its useful life, a soft-drink producer returns the activated carbon used for puri- fying water for its beverages to the supplier. The supplier reactivates the carbon for a second use in nonfood applications. As a consequence, many tons of material are prevented from entering landfills.
c. An evaporator system is installed to treat wastewater and to collect usable solids for other uses.
d. The inks used to print snack packages (for chips) contain heavy metals.
e. Processes are inspected to ensure compliance with environmental standards.
f. Delivery boxes are used five times and then recycled. This prevents 112 million pounds of cardboard from entering landfills and saves two million trees per year.
g. Scrubber equipment is installed to ensure that air emissions are less than the level permitted by law.
h. Local residents are incurring medical costs from illnesses caused by air pollution from automobile exhaust pollution.
i. As part of implementing an environmental perspective for a balanced performance measurement system, environmental performance measures are developed.
j. Because of liquid and solid residues being discharged into a local lake, it is no longer fit for swimming, fishing, and other recreational activities.
k. To reduce energy consumption, magnetic ballasts are replaced with electronic bal- lasts, and more efficient light bulbs and lighting sensors are installed. As a result,
2.3 million kilowatt-hours of electricity are saved per year.
l. Because of a legal settlement, a chemical company must spend $20,000,000 to clean up contaminated soil.
m. A soft-drink company uses the following practice: In all bottling plants, packages damaged during filling are collected and recycled (glass, plastic, and aluminum).
n. Products are inspected to ensure that the gaseous emissions produced during opera- tion follow legal and company guidelines.
o. Costs are incurred to operate pollution-control equipment.
p. An internal audit is conducted to verify that environmental policies are being fol- lowed.
Required:
Classify these environmental activities as prevention, detection, internal failure, or external failure costs. For external failure costs, classify the costs as societal or private. Also, label those activities that are compatible with sustainable development with ‘‘SD.''
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