Question
Auckland Coffee has evaluated the social and environmental costs of its coffee roasting facility. The costs are listed below. Cost ($) Depreciation of oven fume
Auckland Coffee has evaluated the social and environmental costs of its coffee roasting facility. The costs are listed below.
| Cost ($) |
Depreciation of oven fume extractor system | 4,000 |
Employee training costs to reduce environmental accidents | 5,600 |
Monitoring systems to detect fumes | 4,800 |
Fine from Auckland city council for dumping coffee grounds into the sewer | 5,600 |
Inspection of drainage systems to detect problems with discharge | 1,500 |
Reduction in value of nearby houses due to odour | 53,000 |
Routine cleaning of extractor system to remove coffee residues | 2,500 |
Disposal of waste coffee grounds | 5,600 |
Lost sales due to poor environmental reputation | 8,000 |
Obtaining ISO 14001 certificate | 10,000 |
Workers compensation claims due to poor environmental practices | 7,000 |
Medical costs relating to communities inhaling polluting air caused by Auckland Coffee | 7,500 |
As a management accountant of Auckland Coffee, calculate the social costs that relate to the operation.
Explain the link between social costs and environmental costs
Prepare an environmental cost report showing Environmental cost classification suggested by the Environmental Protection Agency (EPA). In your report also state the reasons for your categorization
Provide one example of tier 3 and tier 5 that may have been overlooked in the analyses. Also, outline the steps management would take to reduce these costs.
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