Page 7 - CIMA OCS August 2018 Day 2 Tasks

Chapter 8

MANAGEMENT ACCOUNTING (P1)

PRACTICE TASKS

EXERCISE 1 (COSTING)

UPDATE

Yesterday Nina Thomas (Product Director) placed a copy of a press article (See reference
materials below) on your desk with a note saying that a meeting has been called to discuss the
implications of this for the business.

TRIGGER

This morning Nina Thomas sent you the following email:

To: You
From: Nina Thomas
Subject: Environmental concerns

Hope you’ve had a chance to read the article I left on your desk yesterday. It seems to have
caused quite a stir among the directors. Fred Thomas feels that most of the issues relate to
growers so do not concern us. Ben Jones, on the other hand, thinks that we need to ensure that
we have “whiter than white” image to ensure we keep market share in a time when younger
consumers are becoming more concerned about the environmental impact of the products they
buy. Christie Smith suggested that we need to categorise environmental costs better in order to
control them.

I believe that you have covered environmental management accounting as part of your studies so
Christie suggested that I ask you to prepare some briefing notes on the following:

• Explain why management awareness of the environmental impact of the business is
important, including reference to Fred’s viewpoint, and
• How environmental cost can be categorised with examples of such costs relevant to the
business, including some suggestions how such costs could be reduced.
Nina

TASK

Prepare an email addressing Nina’s points.
(Time allocation: 40 minutes)

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