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At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management program. As a first step, it identified the following costs

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At the end of 20x5, Bing Pharmaceuticals began to implement an environmental quality management program. As a first step, it identified the following costs in its accounting records as environmentally related for the calendar year just ended: Settling personal injury claims 20x5 $3,000,000 Treating and disposing of toxic waste 12,000,000 Cleanup of chemically contaminated soil 4,500,000 Inspecting products and processes 1,500,000 Operating pollution control equipment 2,100,000 Licensing facilities for producing contaminants 900,000 Evaluating and selecting suppliers 300,000 150,000 187,500 Developing performance measures Recycling products Required: 1. Prepare an environmental cost report by category. Assume that total operating costs are $150,000,000. Round percentages to two decimal places, if rounding is required. For example, 5.79% would be entered as "5.79". Bing Pharmaceuticals Environmental Cost Report For the Year Ended December 31, 20x5 Environmental Costs Total Percentage of Operating Costs Prevention costs: Detection costs: Internal failure costs: External failure costs: Total quality costs % % % % % 2. Select the pie chart that illustrates the relative distribution percentages for each environmental cost category. a. b. Prevention 2% Internal Failure 7% External Failure 30% External Failure 30% Detection 61% Prevention Detection 2% 7% External Failure 30% d. Internal Failure 2% Prevention 7% The correct answer is Detection 61% Detection 30% Internal Failure 61% Internal Failure 2% Prevention 7% External Failure 61%

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