Cornerstone Exercise 14.5 (Algorithmic) Environmental Cost Report

Verde Company reported operating costs of $57,000,000 as of December 31, 2015, with the following environmental costs:

Testing for contamination	$ 1,539,000
Inspecting products	684,000
Treating toxic waste	2,850,000
Obtaining ISO 14001 certification	1,083,000
Designing processes	912,000
Cleaning up oil spills	4,161,000
Maintaining pollution equipment	969,000
Cleaning up contaminated soil	5,757,000

Required:

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1. Prepare an environmental cost report, classifying costs by quality category and expressing each as a percentage of total operating costs. Round percentages to two decimal places, if rounding is required. For example, 5.79% would be entered as "5.79".

Verde Company
Environmental Cost Report
For the Year Ended December 31, 2015
		Environmental Cost		Total Environmental Cost		Percentage of Operating Costs
Prevention costs:
		$
				$		%
Detection costs:
		$
						%
Internal failure costs:
		$
						%
External failure costs:
		$
						%
Total quality costs				$		%