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: $$\begin{array} { l r r } & \text { Product } \mathrm { ABC } & \text { Product XYZ } \\\text { Production costs (non-environmental) } & \$ 400,000 & \$ 500,000 \\\text { Units produced } & 100,000 & 200,000 \\\text { Maintenance hours for pollution equipment } & 1,000 & 4,000 \\\text { Kilograms of toxic waste } & 10,000 & 30,000\end{array}$$ A. Assign the environmental activity costs to Product ABC and to Product XYZ.
B. Calculate the unit environmental cost of Product ABC.
C. Calculate the unit environmental cost of Product XYZ.
D. Calculate the overall unit cost of Product ABC.
E. Calculate the overall unit cost of Product XYZ.