Sustainability Chapter 15 Complete Test Bank

Managerial Accounting, 6e (Braun et al.)

Chapter 15 Sustainability

15.1 Describe sustainability and how it can create business value

1) Sustainability is an expense item only. An organization choosing sustainability will see reduced profits.

Diff: 1

LO: 15-1

EOC: QC15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

2) Environmental sustainability should only be the concern of large multinational manufacturing corporations.

Diff: 1

LO: 15-1

EOC: S15-4

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

3) Sustainability considers not only the needs of the present generation, but also the needs of future generations.

Diff: 1

LO: 15-1

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

4) Government grants and tax credits increase the costs of implementing sustainability measures.

Diff: 1

LO: 15-1

EOC: QC15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

5) Possible future liabilities related to pollution may negatively affect an organization's ability to access credit.

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

6) Implementing sustainable business practices may help an organization to grow its market share.

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

7) For maximum impact, a firm should initially focus on pollution control and cleanup measures.

Diff: 1

LO: 15-1

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

8) Integrating sustainable business practices may help to identify new revenue streams for an organization.

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

9) The "triple bottom line" reports on three factors: profits, people, and planet.

Diff: 1

LO: 15-1

EOC: E15-23B

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

10) When Doubletree Hotel in Oregon created a "green" floor, it saw decreased housekeeping costs, laundry costs, and personal consumables costs. This situation is an example of which type of reason to implement sustainable initiatives?

A) Stakeholder influence

B) Competitive strategy

C) Cost reduction

D) None of the above

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

11) ________ may include shareholders, bankers, special interest groups, employees, policy makers, customers, suppliers, or community members.

A) Stakeholders

B) Regulations

C) Constraints

D) None of the above

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

12) Which of the following is a reason an organization would pursue sustainability?

A) To improve its competitive position

B) To save money

C) To appease shareholders

D) All of the above

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

13) Environmental sustainability is the primary concern of which of the following types of organizations?

A) Large domestic corporations

B) Global service firms

C) Manufacturing firms

D) All organizations regardless of size, location, or sector

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

14) There are several reasons an organization might pursue sustainable initiatives. "Increasing pressure from customers has pushed a utility company to maintain average rates for electricity that are lower than the national average." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

15) There are several reasons an organization might pursue sustainable initiatives. "Due to rising costs, a manufacturing firm has reduced the amount of plastic used in each of its products, which helps to keep down the cost of raw materials (plastics). The drop in plastic usage also reduces the amount of plastic sent to the landfill after consumer use." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

16) There are several reasons an organization might pursue sustainable initiatives. "A legislative act requires retailers to take-back old batteries and electronic devices for recycling or reuse." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

17) There are several reasons an organization might pursue sustainable initiatives. At one organization, employees approached management about implementing green practices throughout the business. This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

18) There are several reasons an organization might pursue sustainable initiatives. "An automobile manufacturer has committed to being the market leader in fuel economy with every new vehicle developed." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

19) There are several reasons an organization might pursue sustainable initiatives. "As a result of significant increase in the number of non-compliance notices it received in a recent year, an organization increased sustainability training and focused management attention on sustainability." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

20) There are several reasons an organization might pursue sustainable initiatives. "A national hotel chain instituted a paper-saving program that reduced the cost of office paper purchased by 20% annually." This situation is an example of which type of reason to implement sustainable initiatives?

A) Cost reduction

B) Regulatory compliance

C) Stakeholder influence

D) Competitive strategy

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

21) Which of the following is not an example of a cost reduction reason to support environmental sustainability?

A) Utilizing tax credits to upgrade to more energy efficient windows

B) Encouraging hotel guests to turn off air-conditioning units when leaving their rooms

C) Requiring employees to print on both sides of a piece of paper

D) Installing motion sensing lights in restrooms

Diff: 1

LO: 15-1

EOC: S15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

22) For maximum effectiveness sustainable strategies are often implemented at which stage of an organization's value chain?

A) Design

B) Production

C) Distribution

D) Research

Diff: 1

LO: 15-1

EOC: E15-24B

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

23) A common definition of ________ is the ability to meet the needs of the present without compromising the ability of future generations to meet their own needs.

A) environmental management accounting

B) sustainability

C) triple bottom line

D) carbon footprint

Diff: 1

LO: 15-1

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

24) Which of the following is not considered as of the factors of the triple bottom line?

A) Profit

B) Productivity

C) People

D) Planet

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

25) The term ________ has been used to signify the economic savings achieved by producing goods and services with fewer ecological resources.

A) eco-efficiency

B) triple bottom line

C) waste audit

D) sustainability

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

26) A company can achieve cost savings by becoming more sustainable. Which of the following is an example of the way a company can reduce costs through sustainability?

A) Companies are attracting and retaining the best and brightest employees.

B) Companies cannot reduce costs in an effort to be sustainable because it is an expensive process.

C) Companies are providing sustainability reporting to be more transparent about their sustainability efforts.

D) Companies are using less packaging and materials in order to reduce waste.

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

27) A waste audit is best described by which of the following statements?

A) A study of operations to determine how to eliminate all waste a company produces

B) A study of a company's waste to determine if it is really detrimental to the planet

C) A study on how to turn a company into a paperless environment in order to reduce the amount of paper waste a company produces

D) A study of the waste generated from operations and determining how the waste can be avoided as well as possible alternate uses for the waste

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

28) When a company has found an innovative way to reduce their waste sent to the landfill and generate income as well, this is an example of

A) increasing their market share.

B) generating new revenue streams.

C) improving external image.

D) reducing litigation risks.

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

29) When a company makes purchasing decisions based on how well the suppliers manage the social and environment impact of their operations, the company is practicing ________.

A) common sense

B) supply-chain assessment

C) supplier scrutiny

D) due diligence

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

30) EPA stands for ________ and is the regulatory agency that is charged with writing, implementing, and enforcing environmental laws passed by Congress.

A) Environment Press Authority

B) Environmental Permissions Act

C) Environmental Protection Agency

D) Environment and Planet Agency

Diff: 1

LO: 15-1

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

31) Green Structures manufactures custom playground equipment from recycled plastics for city school districts. The school districts are required to use a certain percentage of recycled materials to comply with its state grants. As a result, Green Structures tracks both virgin (non-recycled) and recycled materials used to manufacture its playground equipment.

The company uses a predetermined manufacturing overhead rate of $7.20 per direct labor hour.

Here is a summary of the materials and labor used on a recent job for Snow Hill Schools:

Calculate the total cost of the Snow Hill job.

A) $8,720.10

B) $7,705.90

C) $8,213.00

D) $8,561.70

Diff: 2

LO: 15-1

EOC: E15-11A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

32) Green Structures manufactures custom playground equipment from recycled plastics for city school districts. The school districts are required to use a certain percentage of recycled materials to comply with its state grants. As a result, Green Structures tracks both virgin (non-recycled) and recycled materials used to manufacture its playground equipment.

The company uses a predetermined manufacturing overhead rate of $7.10 per direct labor hour.

Here is a summary of the materials and labor used on a recent job for Snow Hill Schools:

Calculate the percentage of recycled content used in the Snow Hill Schools job (using pounds).

A) 63%

B) 38%

C) 167%

D) 60%

Diff: 2

LO: 15-1

EOC: E15-11A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

33) Breezy Mills, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Breezy Mills is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $700,000 and would provide a net cost savings of $97,000 per year. The turbine will have a life of 28 years.

What is the payback period, in years, for the wind turbine?

A) 7.22 years

B) 20.78 years

C) 28.00 years

D) 35.22 years

Diff: 2

LO: 15-1

EOC: E15-20A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

34) Breezy Mills, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Breezy Mills is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $500,000 and would provide a net cost savings of $60,000 per year. The turbine will have a life of 30 years.

If the company assigns a discount rate of 8% to this project, what is the net present value (NPV) of the wind turbine?

Present Value of $1

Present Value of Annuity of $1

A) $175,480

B) -$175,480

C) $1,175,480

D) $500,000

Diff: 2

LO: 15-1

EOC: E15-20A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

35) Kort Manufacturing is conducting preliminary research into installing a geothermal heat pump to heat and cool its factories and offices. The initial cost of installing the new system is $255,000; however, the company will save $75,000 annually on its heating and cooling costs. The system has an expected life of 25 years.

What is the payback period, in years, for the geothermal heat pump?

A) 3.40 years

B) 21.60 years

C) 25.00 years

D) 28.40 years

Diff: 2

LO: 15-1

EOC: E15-34B

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

36) Kort Manufacturing is conducting preliminary research into installing a geothermal heat pump to heat and cool its factories and offices. The initial cost of installing the new system is $255,000; however, the company will save $45,000 annually on its heating and cooling costs. The system has an expected life of 30 years.

Present Value of $1

Present Value of Annuity of $1

What is the net present value (NPV) of the project, assuming a discount rate of 14%?

A) $60,135

B) -$60,135

C) $315,135

D) $255,000

Diff: 2

LO: 15-1

EOC: E15-34B

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

37) Upscale Metal Company stamps sheet metal into blanks that are used in a variety of consumer products. The average cost for sheet metal is $75 per ton. The company's waste disposal company charges $65 per ton to dispose of manufacturing waste. The stamping process currently employed by Upscale Metal Company generates an average of 150 tons of waste per month.

What is the annual cost of stamping waste, including both the materials cost and the disposal cost?

A) $252,000

B) $21,000

C) $135,000

D) $117,000

Diff: 2

LO: 15-1

EOC: E15-13A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

38) Upscale Metal Company stamps sheet metal into blanks that are used in a variety of consumer products. The average cost for sheet metal is $75 per ton. The company's waste disposal company charges $45 per ton to dispose of manufacturing waste. The stamping process currently employed by Upscale Metal Company generates an average of 170 tons of waste per month.

What is the net amount the company would save per year if stamping waste could be sold to a recycler for $35 per ton?

A) $163,200

B) $91,800

C) $12,750

D) $71,400

Diff: 2

LO: 15-1

EOC: E15-13A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

39) Upscale Metal Company stamps sheet metal into blanks that are used in a variety of consumer products. The average cost for sheet metal is $80 per ton. The company's waste disposal company charges $60 per ton to dispose of manufacturing waste. The stamping process currently employed by Upscale Metal Company generates an average of 120 tons of waste per month.

The company has developed a new system that would increase the efficiency of its stamping process. The new system has an annual cost of $50,000, but would reduce stamping waste by 50%, the remaining waste would be sold to a recycler for $30 per ton. What is the net savings if Upscale Metal Company implements this new system?

A) $115,600

B) $165,600

C) $86,400

D) $21,600

Diff: 2

LO: 15-1

EOC: E15-13A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

40) CF Bike Frames manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists. CF Bike Frames has found a CNC (computer numerical control) machine that will significantly reduce manufacturing waste while improving the quality of the frames. The new CNC machine will increase annual fixed costs by $13,801, but will decrease variable cost per unit by $170. The company expects to sell 790 frames next year.

Annual data for the current system are as follows:

By what amount will the breakeven point in units increase (decrease) if CF Bike Frames purchases the new CNC machine? (Round any intermediary calculations and your final answer to the nearest whole unit.)

A) (63)

B) 63

C) 250

D) (250)

Diff: 2

LO: 15-1

EOC: E15-15A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

41) CF Bike Frames manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists. CF Bike Frames has found a CNC (computer numerical control) machine that will significantly reduce manufacturing waste while improving the quality of the frames. The new CNC machine will increase annual fixed costs by $13,825, but will decrease variable cost per unit by $190. The company expects to sell 750 frames next year.

Annual data for the current system are as follows:

By what amount will the breakeven point in dollars increase (decrease) if CF Bike Frames purchases the new CNC machine? (Round any intermediary calculations and your final answer to the nearest whole unit.)

A) ($78,000)

B) $78,000

C) ($318,650)

D) $318,650

Diff: 2

LO: 15-1

EOC: E15-15A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

42) CF Bike Frames manufactures carbon fiber bicycle frames for professional racing and avid amateur cyclists. CF Bike Frames has found a CNC (computer numerical control) machine that will significantly reduce manufacturing waste while improving the quality of the frames. The new CNC machine will increase annual fixed costs by $140,660, but will decrease variable cost per unit by $160. The company expects to sell 950 frames next year.

Annual data for the current system are as follows:

By what amount will CF Bike Frames' operating income increase (decrease) if they purchase the new CNC machine?

A) $11,340

B) ($11,340)

C) $303,690

D) ($303,690)

Diff: 2

LO: 15-1

EOC: E15-15A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

43) The city of Philadelphia, Pennsylvania is reviewing proposals for the demolition of historic, but dilapidated, homes in its "Old City" neighborhood. The homes, many dating back 150 years, contain lead paint, lead pipes, and asbestos insulation that require special disposal at a special landfill at a cost of $52,000.

The city conducted a life-cycle assessment (LCA) and discovered that the city could reclaim the old woodwork, bricks of the historic homes, and repurpose the materials to use in a new construction project. The Repurpose Crew Company submitted the lowest bid of $490,000 to properly dismantle the old homes. Construction Junction, which specializes in the sale of reclaimed building materials, has offered to purchase the materials for $335,000.

What is the net cost to repurpose the building materials?

A) $155,000

B) $103,000

C) $207,000

D) $335,000

Diff: 2

LO: 15-1

EOC: E15-16A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

44) The city of Philadelphia, Pennsylvania conducted a life-cycle assessment (LCA) and is reviewing proposals for the demolition of historic, but dilapidated, homes in its "Old City" neighborhood. The homes, many dating back 150 years, contain lead paint, lead pipes, and asbestos insulation that require disposal at a special landfill at a total cost of $50,000.

A second option for the city is to reclaim the old woodwork, and bricks of the historic homes and repurpose the materials for use in new construction. The Repurpose Crew Company submitted the lowest bid of $450,000 to properly dismantle the old homes. Construction Junction, which specializes in the sale of reclaimed building materials, has offered to purchase the materials for $375,000.

Which of the following is a qualitative factor that Philadelphia should consider in its analysis?

A) Repurposing the building materials will reduce hazardous waste entering landfills.

B) The cost to recycle the building materials is $25,000 greater than the cost to dispose of the materials.

C) The price offered by Construction Junction may be too low, given the cost to deconstruct the buildings.

D) The bid submitted by The Repurpose Crew Company is too high for the prevailing economic conditions.

Diff: 2

LO: 15-1

EOC: E15-16A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

45) Recycle This Paper Company produces paper cups for a national chain of coffee shops. Twenty-five percent of the paper used to produce the cups comes from post-consumer (recycled) paper. This satisfies the demands of the national coffee chain, which, for public relations reasons, requires a certain percentage of recycled content.

Recycle This Paper Company has developed a new method that will allow it to increase the percentage of post-consumer material per cup, while reducing the total paper needed per cup. This is a selling feature for the coffee chain and also reduces the company's costs.

The proposed method will reduce the total quantity of paper required per cup of 0.008 pounds by 15%, but will increase the overall cost of paper per pound from $1.24 per pound to $1.35 per pound.

Beginning inventory for the year will be 270 pounds and desired ending inventory is 1,600 pounds. Total production for the year is projected at 3,200,000 cups.

If Recycle This Paper Company implements the new system, what is the expected cost savings for paper purchased during the year? (Do not round any intermediary calculations. Round your final answer to the nearest dollar.)

A) $2,221

B) $33,393

C) $31,172

D) $64,565

Diff: 2

LO: 15-1

EOC: E15-16A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

46) Recycle This Paper Company produces paper cups for a national chain of coffee shops. Twenty-five percent of the paper used to produce the cups comes from post-consumer (recycled) paper. This satisfies the demands of the national coffee chain, which, for public relations reasons, requires a certain percentage of recycled content.

Recycle This Paper Company has developed a new method that will allow it to increase the percentage of post-consumer material per cup, while reducing the total paper needed per cup. This is a selling feature for the coffee chain and also reduces the company's costs.

The proposed method will reduce the total quantity of paper required per cup of 0.006 pounds by 15%, but will increase the overall cost of paper per pound from $1.21 per pound to $1.32 per pound.

Beginning inventory for the year will be 290 pounds and desired ending inventory is 1,300 pounds. Total production for the year is projected at 3,000,000 cups.

If Recycle This Paper Company implements the new system, what is the expected reduction in the quantity of paper that will need to be purchased?

A) 2,700 pounds

B) 4,000 pounds

C) 16,310 pounds

D) 1,300 pounds

Diff: 2

LO: 15-1

EOC: E15-16A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

47) Electric company is an electric utility company. The new CEO is interested in implementing new projects that will not only benefit the environment, but will also benefit the company through cost savings. One of the proposed projects is to offer a paperless, online billing solution for its customers in Columbus Township. Preliminary market research indicates that participation in the paperless option will be between 20 - 30% of customers.

Total costs for the paperless system are projected to be $100,000 per quarter, which are comprised solely of fixed costs for IT personnel and computer hardware. The CEO has asked you to perform an analysis of the proposed paperless billing system.

Historical costs for the current paper-based system are as follows:

Requirements:

a. Using the historical costs calculate the variable costs per bill under the current system.

b. The company projects that next quarter 650,000 bills will be mailed to customers.

What is the projected cost savings if the maximum number, 30%, of customers choose

the paperless system?

c. What is the projected cost savings if the minimum number, 20%, of customers choose

the paperless system?

Diff: 2

LO: 15-1

EOC: E15-17A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

48) The manager at Cleanworks Enterprises, in Virginia, conducted a meeting with the operations manager to discuss the results of a recent waste audit conducted by the city officials and to develop a new sustainability strategy. The manager announced that the engineer has developed a system that filters the storm-water runoff into the canals that flow into the Chesapeake Bay. The cost of the new system is $5,500,000. The new system is expected to eliminate bacteria in run-off water, and it is expected to reduce the level of water pollution that flows into the Chesapeake Bay. The new system is expected to generate taxes payable to the company of up to $2,500,000 in storm-water fees each year. The pump is expected to have a life of 20 years.

Compute the payback period, in years. With respect to the business, should the manager at Cleanworks Enterprises implement this new sustainability strategy? Include a discussion about the three factors that relate to sustainability (environmental, economic, and social factors).

Diff: 3

LO: 15-1

EOC: E15-34B

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

49) Mr. Morse is an entrepreneur that builds and manages organic vegetables in the United States. Mr. Morse recently developed a sustainability strategy to build a large greenhouse and warehouse in a recessed area in North Carolina. The greenhouse is expected to produce organic vegetables, and Mr. Morse can sell the organic vegetables to the state to feed homeless people at the local community centers in the state. This project is expected to generate a minimum of 100 full-time employees. The cost to build the new greenhouse is $10,000,000 and the food that is produced at the greenhouse is expected to generate $1,500,000 in payments from the state.

Compute the payback period, in years. Should Mr. Morse build the new greenhouse? Is the strategy to build the new greenhouse an effective sustainability strategy? Why or why not?

Diff: 3

LO: 15-1

EOC: E15-34B

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

50) Live Oak Company sells condominiums in Florida. During the recession, the company moved its sales operations to an older building near the beach. The new sales office does not attract new clients and the company cannot retain its employees because the employees resign and they pursue employment at other organizations that offer professional, newer, office facilities. The sales manager conducted a meeting to discuss the business reasons for adopting sustainable business practices. The sales manager asked the operations manager for approval to update the old facilities. The sales manager estimates that the cost to update the building is $150,000. The sales manager estimates that if the proposal to update the old building is approved, the company can generate at least $80,000 in additional sales.

Compute the payback period, in years, to recover from the cost of renovations. List and discuss at least three business reasons for adopting sustainable business practices.

Diff: 3

LO: 15-1

EOC: E15-34B

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

51) The new managerial accountant at the Environmentally Friendly proposed a method to eliminate waste, recycle a variety of products to enhance sales, and generate profits. The operations manager attended a meeting with the creative manager and proposed that the staff recycle the wood out of the 1,000 old chairs in the warehouse and convert the wood backing into custom picture frames. The operations manager stated that the old wooden chairs in the basement are a fire hazard. The managerial accountant believes that the cost to convert the old wood into custom picture frames is $75,000. The managerial accountant forecasts earnings from the sale of the custom picture frames at $52,000.

Compute the payback period, in years. Which of the following illuminates both internal and external costs to give the manager a complete set of information about how to generate cost-effective solutions to environmental and social concerns?

A) 1.69; internal costs

B) 2.44; external costs

C) 0.69; cost of goods sold

D) 1.44; life-cycle assessment

Diff: 3

LO: 15-1

EOC: S15-7

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

52) The managerial accountant at the Bluewater Technologies attended a meeting with the facilities manager to discuss the internal and external costs during the quarter. The facilities manager provided the managerial accountant with the following cost worksheet that highlights the internal and external costs during the period:

Bluewater Technologies

Cost Worksheet

Year Ending December 31, 2023

The managerial accountant reported that the total environmental costs are 14% of all costs during the year. Calculate the total environmental costs at the Bluewater Technologies.

A) $1,904

B) $2,198

C) $4,508

D) $5,166

Diff: 3

LO: 15-1

EOC: E15-11A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

15.2 Describe Sustainability Reporting and the leading reporting framework

1) Currently, the SEC does not require publicly held corporations to disclose the costs related to remediation of contaminated sites.

Diff: 1

LO: 15-2

EOC: E15-23B

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

2) Sustainability reporting helps companies set goals, measure performance, and manage change as they move towards a more sustainable model of operations.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

3) Large corporations that do not issue sustainability reports are now in the minority.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

4) Sustainability reporting is now a required practice in the United States.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

5) The Global Reporting Initiative has developed a framework for companies to use for sustainability reporting that is used worldwide.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

6) Core reports disclose at least one indicator related to each identified material aspect in the CSR report.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

7) Comprehensive reports disclose all indicators related to each identified material aspect in the CSR report.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

8) Sustainability Accounting Standards Board (SASB) is attempting to standardize the sustainability reporting so that the reports are comparable between companies within the same industry.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

9) Which of the following organizations has developed the GRI Standards?

A) Global Reporting Initiative (GRI)

B) International Accounting Standards Board (IASB)

C) Carbon Disclosure Project (CDP)

D) International Organization for Standardization (ISO)

Diff: 1

LO: 15-2

EOC: S15-2; S15-3; S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

10) Another name used to refer to sustainability reporting is

A) Corporate Social Responsibility report.

B) Environmental, Social, and Governance report.

C) Neither of these choices

D) Both A and B are correct.

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

11) Which of the following organizations are continually working to develop and improve environmental reporting standards?

A) IASB

B) GRI

C) ISO

D) All of the above

Diff: 1

LO: 15-2

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

12) The GRI Standards are organized around three categories. Which of the following is not one of those categories?

A) Economic

B) Internal affairs

C) Environmental

D) Social

Diff: 1

LO: 15-2

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

13) Material topics in accordance with GRI standards are defined as

A) topics that have an insignificant impact to the organization or effect on the economy, environment, and/or society.

B) topics that the organization hopes to venture into with their business in the future that effect the economy, environment, and/or society.

C) topics that have a significant impact or effect on the economy, environment, and/or society.

D) topics that management feel are crucial to their organization in the year ahead that relate to their financial gain.

Diff: 2

LO: 15-2

AACSB: Reflective thinking

14) Which of the following is not a numbered standard under GRI 200: Economic Standards?

A) Customer Privacy

B) Tax 2019

C) Anti-corruption

D) Market Presence

Diff: 2

LO: 15-2

EOC: E15-18A

AACSB: Reflective thinking

15) Which of the following represents a numbered standard under GRI 300: Environmental Standards?

A) Occupational health and safety

B) Procurement Practices

C) Effluents and Waste

D) Local Communities

Diff: 2

LO: 15-2

EOC: E15-18A

AACSB: Reflective thinking

16) Which of the following is not a numbered standard under GRI 400: Social Standards?

A) Human Rights Assessment

B) Child Labor

C) Security Practices

D) Economic Performance

Diff: 2

LO: 15-2

EOC: E15-18A

AACSB: Reflective thinking

17) SASB is an independent non-profit whose mission is to help businesses identify, manage, and report on the sustainability topics that matter most to investors. SASB stands for what?

A) Sustainability Association Societal Business

B) Sustainability Accounting Standards Board

C) Sustainability Act Standards Business

D) Sustainability Association Standards Business

Diff: 1

LO: 15-2

EOC: E15-18A

AACSB: Reflective thinking

18) The GRI Standards are organized around the following three pillars:

A) financial standards, economic standards, and responsibility standards.

B) economic standards, material standards, and core standards.

C) economic standards, environmental standards, and social standards.

D) financial standards, social standards, and comprehensive standards.

Diff: 1

LO: 15-2

EOC: E15-18A

AACSB: Reflective thinking

19) Classify each of the following GRI topics as either Economic Standards, Environmental Standards, or Social Standards as it addresses sustainability.

________ Child Labor

________ Emissions

________ Indirect Economic Impacts

________ Public Policy

________ Marketing and Labeling

________ Biodiversity

________ Anti-competitive Behavior

Diff: 2

LO: 15-2

AACSB: Reflective thinking

15.3 Describe EMA systems and their uses and challenges

1) The role of accounting in sustainability is limited to mandatory external reporting.

Diff: 1

LO: 15-3

EOC: E15-36B

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

2) Materials costs of product outputs category is similar to indirect materials since it becomes part of the final product.

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

3) Physical information has not been a traditional component of managerial accounting systems.

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

4) The total amount of water consumed by an organization is an example of physical information that may be collected by an EMA.

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

5) Environmental management accounting (EMA) utilizes three types of information for internal decision making.

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

6) The categories of costs collected by an EMA system are similar to the costs collected by traditional accounting systems.

Diff: 1

LO: 15-3

EOC: S15-4

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

7) Materials flow accounting (MFA) reconciles physical output with all physical inputs.

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

8) All of the following represent monetary information in an environmental management accounting system except

A) cost of lumber used in tables.

B) wages of workers needed to comply with new EPA standards.

C) gallons of wastewater generated.

D) cost to upgrade factory to reduce emissions.

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

9) Which of the following items does not represent physical information in an environmental management accounting system?

A) Pounds of cardboard recycled

B) Energy costs incurred to cool production equipment

C) Tons of garbage recycled

D) Gallons of wastewater generated

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

10) Which of the following items is most likely to be found on an environmental management accounting report?

A) CEO's salary

B) Public accounting firm's fee for doing financial accounting audit

C) Ratio of recycled trash to total trash

D) Regional sales revenue

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

11) Which of the following items represent monetary information in an environmental management accounting system?

A) Cost of coffee in break room

B) Cost of sulfur used in erasers

C) Cost of wages for secretaries

D) Cost of wages for quality control inspector

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

12) Which of the following items do not represent monetary information in an environmental management accounting system?

A) Cost to upgrade factory equipment to reduce emissions

B) Cost of hiring workers to comply with new EPA standard

C) Cost of secretarial services

D) Cost of materials used in lab to neutralize toxins

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

13) Which of the following items represents monetary information in an environmental management accounting system?

A) Kilowatt hours of electricity used

B) Cost of upgrading factory equipment to reduce emissions

C) Ratio of recycled trash to total trash

D) Cost of janitorial services in office

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

14) The cost to a corporation's image and goodwill as a result of an oil spill would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Intangible cost

B) Prevention cost

C) Waste and emission control cost

D) Materials cost of production outputs

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

15) The cost to install equipment to reduce the emissions of a coal-fired power plant would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Waste and emission control cost

B) Prevention cost

C) Intangible cost

D) Research and development (R&D) cost

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

16) The cost of fabric to produce reusable grocery bags would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Materials cost of product outputs

B) Materials cost of non-product outputs

C) Waste and emissions cost

D) Prevention cost

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

17) The costs incurred by a manufacturer of lawn mowers to develop a method to reduce carbon dioxide emissions from its products would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Research and development (R&D) cost

B) Waste and emission control cost

C) Prevention cost

D) Materials cost of product output

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

18) The cost of monitoring pollutants in the wastewater discharged from a manufacturing plant would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Prevention cost

B) Waste and emission control cost

C) Intangible cost

D) Research and development (R&D) cost

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

19) The system used for the identification, collection, analysis, and use of monetary and physical information is known as?

A) Environmental management accounting (EMA)

B) Materials flow accounting (MFA)

C) Triple bottom line

D) Sustainability

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

20) Communication between environmental, production, and accounting staff is crucial for an EMA system to function effectively.

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

21) An EMA system must make visible the environmental costs hidden in overhead by a traditional accounting system.

Diff: 1

LO: 15-3

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

22) An EMA system only requires aggregated data to function effectively.

Diff: 1

LO: 15-3

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

23) Traditional accounting systems focus on historical information, while EMA systems must also utilize future-oriented information.

Diff: 1

LO: 15-3

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

24) Due to the relative infancy of environmental management accounting, the tools utilized are continuously being developed and improved.

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

25) For an EMA system to be effective, accounting information will need to be tagged with multiple identifiers to serve various information needs.

Diff: 1

LO: 15-3

EOC: S15-7

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

26) Which of the following is a challenge an organization would face in implementing an environmental management accounting system?

A) Environmental costs are traditionally hidden in overhead costs.

B) Information systems are not equipped to deal with environmental information.

C) Environmental accounting is a relatively new field and is still developing.

D) All of the above

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

27) Which of the following items represent physical information in an environmental management accounting system?

A) Total electricity used

B) Cost of electricity used to run plant

C) Cost of materials used in lab to neutralize toxins

D) Cost of shipping containers to customers

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

28) Which of the following items does not represent physical information in environmental management accounting system?

A) Tons of scrap metal recycled

B) Kilowatt hours of electricity used

C) Gallons of toxic waste generated

D) Cost of sulfur used in erasers

Diff: 1

LO: 15-3

EOC: S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

29) The cost of water used to cool steel beams at a steel mill would be categorized as what type of cost by an environmental management accounting system (EMA)?

A) Materials cost of non-product outputs

B) Materials cost of product outputs

C) Waste and emission control cost

D) Intangible cost

Diff: 2

LO: 15-3

EOC: S15-4; S15-5

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

30) An organization faces many challenges when implementing an environmental management accounting (EMA) system. Which of the following inherent challenges must an organization overcome when the costs associated with hazardous materials disposal are combined with other overhead costs in its accounting system?

A) Hidden cost

B) Communication issue

C) Newness of EMA

D) Historical orientation of accounting

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

31) An organization faces many challenges when implementing an environmental management accounting (EMA) system. Which of the following inherent challenges must an organization overcome because its technical staff and accounting staff are in two separate locations, using two separate information systems?

A) Hidden Cost

B) Communication issue

C) Newness of EMA

D) Historical orientation of accounting

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

32) An organization faces many challenges when implementing an environmental management accounting (EMA) system. Which of the following inherent challenges is an accountant facing when he is having difficulty finding literature regarding "best practices" for environmental accounting?

A) Hidden Cost

B) Communication issue

C) Newness of EMA

D) Historical orientation of accounting

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

33) An organization faces many challenges when implementing an environmental management accounting (EMA) system. Which of the following inherent challenges must an organization overcome when it finds that its traditional accounting system does not track information regarding lost sales due to environmental regulation?

A) Hidden Cost

B) Communication issue

C) Newness of EMA

D) Historical orientation of accounting

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

34) An oil company received poor publicity after an oil spill in Lake Erie. The costs of the future lost sales resulting from the bad publicity are not included in the results of operations provided to management even though the loss in sales was substantial. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

35) When it comes to developing an EMA system, there are few reference tools available for environmental management accountants; therefore, organizations are still working to discover what information they need and how it can be reported in an accurate, timely and relevant manner. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

36) The quantity and cost of purchasing hazardous materials is included in the Purchases account for all materials. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Aggregated accounting information

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

37) The cost of wages of workers needed to comply with new EPA standards is included in the Payroll account for all employees. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Aggregated accounting information

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

38) The environmental staff and technical and production staff of a corporation are located in two different offices, in two different cities. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

39) In a traditional accounting system, many indirect costs are assigned to overhead because they are difficult to trace to a product or process. Consequently, many environmental costs may be concealed in the overhead account. This is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

40) In order to provide managers with environmental information, accountants will need to rethink their traditional views on what constitutes a "cost" and do which of the following?

A) Focus on the traditional accounting system

B) Expand their costing system to provide more detailed information

C) Reject any change

D) None of the above

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

41) The current accounting system for Moss Company does not include an estimate of the cost of losing access to markets with environmental-related product restrictions. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

42) Senergy Corporation's current accounting system does not include an estimate of the cost of lost sales resulting from poor environmental performance. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

43) All of the following are challenges that an organization may face when implementing an EMA system except

A) old, outdated nature of environmental management accounting.

B) communication issue.

C) newness of EMA.

D) hidden cost.

Diff: 1

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

44) The costs associated with hazardous materials transportation are combined with other overhead costs in Horning Corporation's current accounting system. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

45) At Britton Company, the production staff does not share information with the environmental staff. This scenario is an example of which type of EMA implementation challenge?

A) Historical orientation of accounting

B) Communication issue

C) Newness of EMA

D) Hidden Cost

Diff: 2

LO: 15-3

EOC: S15-6

AACSB: Reflective thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

46) Flotilla Industries manufactures custom fiberglass hulls for luxury yachts and pleasure boats. The current cost accounting system uses machine hours to allocate manufacturing overhead to each job. The company estimates that in the coming year it will incur $600,000 in manufacturing overhead costs and use 8,000 machine hours.

Depending on the specifications requested by the customer, the hull may use hazardous chemicals that incur greater disposal costs. Flotilla Industries' traditional accounting system includes the cost of hazardous waste disposal in with total manufacturing overhead. Serenity is planning to implement an activity-based costing system to more accurately assign hazardous waste disposal costs to each job.

Expected usage and costs for manufacturing overhead are as follows:

During the year, Yacht #633 was started and completed:

Requirements:

a. Calculate the cost of Yacht #633 using the company's current method of allocating

manufacturing overhead.

b. Calculate the cost of Yacht #633 using the proposed activity-based costing system.

How is this information useful to an environmental management accounting (EMA) system?

Diff: 2

LO: 15-3

EOC: E15-17A

AACSB: Analytical thinking

Learning Outcome: Discuss the legal, ethical, and business concepts that affect managerial accounting.

15.4 Analyze sustainability performance using data analytics tools

1) Column charts in Excel allow a person to better visualize the trends in data than viewing the data in Excel spreadsheet format alone.

Diff: 1

LO: 15-4

AACSB: Reflective thinking

2) Which tab in Excel contains the column chart icon?

A) Formulas

B) Data

C) Review

D) Insert

Diff: 1

LO: 15-4

AACSB: Reflective thinking

3) Which of the following is not a step in creating a column chart in Excel?

A) Select the Home tab to access to the column chart icon.

B) Select the data you wish to chart.

C) Select the Column Chart icon.

D) Click on Insert on the ribbon.

Diff: 1

LO: 15-4

AACSB: Reflective thinking

4) Which of the following represents the steps taken in order to create a column chart in Excel?

A) Right-click on the data cell range, select the Home tab then choose Column Chart, and finally edit the chart title.

B) Highlight the data you choose to select, go to the Formulas tab, choose Column Chart, and customize the chart title.

C) Select the data so it is highlighted, go the Insert tab, select Column Chart, choose the column chart you wish to use, then customize the chart title.

D) Right-click on the highlighted data, select Column Chart from the drop-down menu, and then edit the title on the chart.

Diff: 2

LO: 15-4

AACSB: Reflective thinking

5) Describe the steps taken in order to prepare a column chart in Excel.

Diff: 2

LO: 15-4

AACSB: Reflective thinking