At the beginning of 2010, Heber Company, an international telecommunications company, embarked on an environmental improvement program.
Question:
At the end of 2013, the controller had gathered data that would be used in preparing the environmental progress report. A sample of the data collected is as follows:
As part of its environmental cost reporting system, Heber tracks its total environmental costs. Consider the following cost and sales data:
Year Total Environmental Costs Sales Revenue
2010 .................. $60,000,000 ....................... $500,000,000
2011 .................... 50,000,000 ........................ 500,000,000
2012 .................... 44,000,000 ........................ 550,000,000
2013 ................... 38,500,000 ......................... 550,000,000
Required:
1. Using the data, prepare a bar graph for each of the three environmental variables provided (registrations, energy, and greenhouse gases). Comment on the progress made on these three dimensions.
2. Prepare a bar graph for environmental costs expressed as a percentage of sales. Assuming that environmental performance has improved, explain why environmental costs have decreased.
3. Normalize energy consumption by expressing it as a multiple of sales (BTUs/Sales). Now, prepare a bar graph for energy. Comment on the progress made in reducing energy consumption. How does this compare with the conclusion that would be reached using a non-normalized measure of progress? Which is the best approach? Explain.
Step by Step Answer:
Cornerstones of Cost Management
ISBN: 978-1111824402
2nd edition
Authors: Don R. Hansen, Maryanne M. Mowen