Coyle Pharmaceuticals produces two organic chemicals (Org AB and Org XY) used in the production of two of its most wide-selling anti-cancer drugs. The controller and environmental manager have identified the following environmental activities and costs associated with the two products:

Required:
1. Calculate the environmental cost per pound for each product. Which of the two products appears to cause the most degradation to the environment?
2. In which environmental category would you classify excessive use of materials and energy?
3. Suppose that the toxin releases cause health problems for those who live near the chemical plant. The costs, due to missed work and medical treatments, are estimated at $2,025,000 per year. How would assignment of these costs change the unit cost? Should they be assigned?

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Org AB 7,500,000 2,250,000 750,000 1,875,000 300,000 Org XY Pounds produced Packaging materials (pounds) Energy usage (kilowatt-hours) Toxin relea ses (pounds into air) Pollution control (machine hours) Costs of activities 18,750,000 1,125,000 375,000 375,000 75,000 Using packaging materials Using energy Releasing tox ins (fines) Operating pollution control S3,375,000 900,000 450,000 1,050,000 equipment