Margaret River Winery has developed the following analysis of its environmental costs and revenues for the last financial year:
Employee training cost to improve the management of effluent disposal..............$5,600
Scrap value of broken bottles................................................................(12,560)
Cleaning of exhaust fans.........................................................................4,891
Fine for minor leakage of untreated waste into the Margaret River.....................12,569
Inspection of Drainage systems......................................................................15,421
Restoring land where waste wad dumped in the 1980s..................................16,986
Study tour to the Barossa Valley to select new equipment to reduce wastes ...........4,769
Developing air pollution monitoring systems................................................14,897
Lost sales due to poor environmental reputation.............................................3,787
Workers compensation claim due to poor environmental practices.......................5,652
Obtaining ISO 14001 certification.................................................................67,908
Total...............................................................................................$139,919
Total costs for the plant were $1 309 670 per annum.
Required:
1. Classify each of the costs identified above as Tier 1 to Tier 5, as shown in Exhibit 17.5
2. Suggest two examples of environmental cost that could be classified as Tier 3, Tier 4 and Tier 5 for may have been overlooked.
3. For each of the six costs identified in requirement 2, outline steps that managers of management Fiver Winery could implement to reduce those cost.