Page 199 - APM Integrated Workbook STUDENT S18-J19

Environmental management accounting

EMA techniques

Three key EMA techniques

1 2 3

ABC Lifecycle costing Flow cost accounting
 Environmental costs  Considers whole  Looks at material
hidden within cost of product over flows and losses at
overheads are its whole life rather different stages of
separately than single production process.
identified. accounting period.
 Aims to reduce
 Cost drivers are  Ensures all material quantities
identified. environmental and wastage.
costs, e.g.
 Product costs more  Related to input
realistic. decommissioning, output analysis
are taken into
 Reducing incidence account ensuring which focuses on
of cost drivers product viability. waste in processes.
reduces costs.
 Considers how
environmental costs
can be reduced
from the outset, e.g.
through careful
design.

Illustrations and further practice

Now try TYU question 2 from Chapter 14 of the Study Text.

189