Avade Company, a manufacturer of cellular phones, has provided the following environmental… 1 answer below »

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.