You were hired as the companys senior accountant for Plana Insecticide Factory. During your audit of the companys operations for process walkthrough, you found out that the company is dumping poisonous substances into the river, and the operations manager is falsifying reports to authorities that the substances are not harmful enough to kill marine resources and cause cancer to humans. In addition, the factory head is claiming that there had been no reports/complaints yet from the nearby village.

Plant Manager: So what do you want now? Require us to look for other places where we can dump our waste?

Factory Head: Come on! It will add soooo much costs to the company. I dont think we can remain cost competitive if we will treat our waste to neutralize its harmful effects to the environment.

Plant Controller: Thats right. If we lose our advantage, our 10,000 employees will all get unemployed and the citys economy will surely get affected. That includes you!!

Required: Identify the costs (both fixed and variable) that would increase/decrease should the company decide to treat the waste than dump it. How would these costs affect the contribution margin of the company?