Avade Company, a manufacturer of cellular phones, has provided the following environmental… 1 answer below »
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Avade Company, a manufacturer of cellular phones, has provided the following environmental information in its Corporate Social Responsibility Report (CSR) for 2006 and 2007; the data for 2008 comes from the preliminary draft of the 2008 CSR. In 2006, Avade committed itself to a continuous environmental improvement program, which was implemented throughout the company. Environmental Activity 2006 2007 2008
Disposing of hazardous waste
$1,600,000
$1,200,000
$ 400,000
Measuring contaminant releases
80,000
800,000
560,000
Releasing air contaminants
4,000,000
3,200,000
2,000,000
Producing scrap (nonhazardous)
1,400,000
1,200,000
1,000,000
Operating pollution equipment
2,080,000
1,680,000
1,040,000
Designing processes and products
400,000
2,400,000
800,000
Using energy
1,440,000
1,296,000
1,152,000
Training employees (environmental)
80,000
160,000
320,000
Remediation (cleanup)
3,200,000
2,400,000
1,520,000
Inspecting processes
0
800,000
640,000
At the beginning of 2008, Avade began a new program of recycling nonhaz- ardous scrap. The effort produced recycling income totaling $200,000. The market- ing vice president and the environmental manager estimated that annual sales rev- enue had increased $1,600,000 since 2006 because of an improved public image relative to environmental performance. The company’s Finance Department also estimated that Avade saved $640,000 in 2008 because of reduced finance and insur- ance costs, all attributable to improved environmental performance. All reductions in environmental costs from 2006 to 2008 are attributable to improvement efforts. Furthermore, any reductions represent ongoing savings.
Required
1. Avade has decided to prepare an environmental financial statement for 2008 for the products division. This report will be placed in the 2008 CSR. In the Cost section, classify environmental costs by category (prevention, detection, etc.). In the Benefits section, classify benefits into three categories: income, current sav- ings, and ongoing savings.
2. Evaluate the changes in environmental performance.
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