ENVIROMENTAL MANAGEMENT ACCOUNTING

(a)

Wastage disposal:
the cost bear by the entity, used to dispose or sell waste material output or any asset from the
production process. Alternative controls can be applied to reduce the volume of wastage material which
could reduce the cost.

Water consumption:
the cost incurred to purchase the water and while using in the production as an essential resource the
entity could not avoid it but it can be reduced to a certain level by adopting alternative ways e.g. by
purchasing water from cheap provider.

Energy Consumption:
The cost bear by the entity because of electricity purchased for machinery and plants used in the
production and the cost can be minimized by operating the machinery at the time when cost rate Is low.

Transportation cost:
The cost incurred while delivering goods and this cost can be reduced by using less consumption
vehicles and making small deliveries at once per time so that maximum cost a can be covered up.

(b)

MANAGEMENT ACCOUNTING TECHNIQUES:

INPUT VS OUTPUT ANALYSIS:

Method in which resources input are compared with the output produce and overcome the fluctuations
This method is used to avoid waste material.

FLOW COST ACCOUNTING:

The method used to reduce the usage of resources which would be beneficial for environment as well as
good for business health.

ABC COSTING:

The costing technique used to allocate the overheads on the basis of related cost pools and cost drivers
with the help of this costing technique the overheads can be apportion more efficiently and a suitable
cost per unit could be charged.

LIFECYCLE COSTING:

The costing technique used to allocate the cost on its whole life spam which could shows the actual
profit which could be drawn from the product in upcoming future as the maximum portion of 90%
belongs to research and development cost.