ACCA Strategic Professional · Advanced Performance Management · Sustainability
Tandem Textiles wants to improve decisions on product pricing and process design by tracing environmental costs across the whole life of its products, from design through use to disposal, including costs borne by the firm after sale. Which EMA technique does this describe?
This describes life cycle costing. It tracks environmental and other costs over the entire life of a product, from design through use to disposal, so pricing and design decisions reflect costs the firm bears after sale, unlike techniques focused only on production flows.
- AInput/output analysis
- BLife cycle costingCorrect
- CEnvironmental activity-based costing excluding post-sale costs
- DFlow cost accounting limited to production
Explanation
Life cycle costing considers all costs over a product's life, including design, use and end-of-life disposal that the firm bears. Input/output analysis reconciles physical inputs to outputs, and MFCA focuses on material flows within production, so neither covers the full product life as described.
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