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Cost of Environmental Quality Report You are given the following environmental quality-related costs:
Employee training
$100,000
Product design
140,000
Supplier certification
40,000
Process inspection
320,000
Depreciation-pollution-control equipment
400,000
Maintaining pollution-control equipment
200,000
Cleaning up polluted lake
500,000
Restoring land after use
700,000
Property damage claim
600,000
Requried:
1. Prepare a cost of environmental quality report for the year. Determine subtotals for each of the four reporting categories and express each subtotal as a percentage of total operating expenses ($10,000,000) for the year.
2. Based on the report you prepare, what conclusions can you draw regarding the company's environmental quality performance for the year?
3. Can you offer management suggestions for the design of an effective cost of environmental quality reporting system? (That is, what would make for a good reporting system?)
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