A Company Was Evaluating the Activity-Based Environmental Cost of Two

Essay

A company was evaluating the activity-based environmental cost of two different products: Product ABC and Product XYZ.Information on two environmental activities is as follows: $$\begin{array} { l l r } \text { Activity } & \text { Driver } & \text { Cost } \\\text { Maintaining pollution equipment } & \text { Maintenance hours } & \$ 120,000 \\\text { Toxic waste disposal } & \text { Kilograms of waste } & 80,000\end{array}$$ Data on Product X and Product Y follows: $\begin{array}{lrr}&\text { Product } \mathrm{ABC}& \text { Product } \mathrm{XYZ}\\\text { Production costs (non-environmental) } & \$ 400,000 & \$ 500,000 \\\text { Units produced } & 100,000 & 200,000 \\\text { Maintenance hours for pollution equipment } & 1,000 & 4,000 \\\text { Pounds of toxic waste } & 10,000 & 30,000\end{array}$ A. Assign the environmental activity costs to Froduct $\mathrm{ABC}$ and to Froduct $\mathrm{XYZ}$ .
B. Calculate the unit environmental cost of Froduct $A B C$ .
C. Calculate the unit environmental cost of Froduct XYZ.
D. Calculate the overall unit cost of Product ABC.
E. Calculate the overall unit cost of Product XYZ.