ACCA Strategic Professional · Advanced Performance Management · Sustainability
Verdana Foods wants to understand the total environmental impact of its packaged soup, including raw material extraction, manufacture, distribution, customer use and disposal. Which technique is best suited to this?
Environmental life cycle assessment is best. It examines environmental impacts at every stage of a product's life, from raw material extraction through manufacture, distribution, use and disposal, so it captures the full footprint that cost-focused techniques would miss.
- ALife cycle costing from the customer's perspective only
- BEnvironmental life cycle assessment covering cradle to graveCorrect
- CActivity-based costing of the factory overheads
- DTarget costing at the design stage only
Explanation
Life cycle assessment evaluates environmental impacts across all stages from extraction to disposal (cradle to grave). Activity-based costing and target costing deal with cost allocation or cost-setting, not the total environmental footprint, and a customer-only view misses upstream stages.
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