Justifying Environmental Cost Allocation in a Multiple Product Firm: A Case Study
This case study examines the effect of environmental cost allocation on production cost and the outcome for environmental management decisions. Using a revised cost allocation – referred to in this paper as environmental cost allocation – the paper contrasts overhead allocation between traditional cost allocation and environmental cost allocation. In addition, production cost derived from the traditional allocation of waste cost is compared with the revised environmental cost allocation. Findings indicate that a revised environmental cost allocation discloses more accurate overhead cost and hence production cost; and that management is motivated to make informed environmental management decisions if a product related environmental cost is made to reflect in the production cost of the polluting product. The paper highlights the practical significance of objective environmental cost allocation on corporate waste management, which thus creates a valuable awareness on the part of the management and accountants of firms in developing countries for the need to fine-tune the dominant traditional costing system. It also suggests avenues for further research to examine the impact of costing systems on environmental investments.
Volume (Year): 7 (2009)
Issue (Month): 4 ()
|Contact details of provider:|| Postal: Cankarjeva 5, SI-6104 Koper, PO BOX 345|
Phone: 05 610 20 00
Fax: 05 610 20 15
Web page: http://www.mgt.fm-kp.si
More information through EDIRC
|Order Information:|| Web: http://www.mgt.fm-kp.si Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Trevor Hopper, 2009. "Management accounting in less developed countries: what is known and needs knowing," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 22(3), pages 469-514, March.
- Burnett, Royce D. & Hansen, Don R., 2008. "Ecoefficiency: Defining a role for environmental cost management," Accounting, Organizations and Society, Elsevier, vol. 33(6), pages 551-581, August.
- Satish Joshi & Ranjani Krishnan & Lester Lave, 2002. "Estimating the Hidden Costs of Environmental Regulation," Working Papers 02-10, Center for Economic Studies, U.S. Census Bureau.
When requesting a correction, please mention this item's handle: RePEc:mgt:youmgt:v:7:y:2009:i:4:p:403-420. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alen Jezovnik)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.