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Verde Company reported operating costs of $35,000,000 as of December 31, 20x5, with the following environmental costs: Testing for contamination $ 455,000 560,000 1,085,000 770,000 Inspecting products Treating toxic waste Obtaining ISO 14001 certification Designing processes Cleaning up oil spills Maintaining pollution equipment Cleaning up contaminated soil 525,000 2,415,000 350,000 3,885,000 Required: 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, 20x5 Environmental Cost Total Environmental Cost Percentage of Operating costs Prevention costs: % Detection costs: % Internal failure costs: % External failure costs: % od Total quality costs % % Cleaning up contaminated soil Cleaning up oil spills Inspecting products Maintaining pollution equipment Obtaining ISO 14001 certification Cleaning up contaminated soil Cleaning up oil spills Designing processes Maintaining pollution equipment Testing for contamination Cleaning up contaminated soil Cleaning up oil spills Designing processes Maintaining pollution equipment Testing for contamination Cleaning up contaminated soil Cleaning up oil spills Designing processes Inspecting products Maintaining pollution equipment Cleaning up contaminated soil Cleaning up oil spills Designing processes Inspecting products Treating toxic waste Cleaning up contaminated soil Cleaning up oil spills Designing processes Inspecting products Maintaining pollution equipment Cleaning up oil spills Designing processes Inspecting products Maintaining pollution equipment Obtaining ISO 14001 certification Cleaning up contaminated soil Designing processes Inspecting products Maintaining pollution equipment Obtaining ISO 14001 certification 2. What if Verde deliberately did not include the cost of damaging the ecosystem because of solid waste disposal in its environmental cost report? What is the most likely reason? The costs are inconsequential and are therefore immaterial. The costs are social costs and formal recognition is not required. The statement users have no interest in this cost