ACCA Strategic Professional · Advanced Performance Management · Sustainability
Zenara Foods plc wants to report its environmental performance in a way that links financial results with resource use. Management has data on energy used, water consumed and waste sent to landfill, and also wants to identify the cost of material that is bought but never becomes saleable product. Which technique is specifically designed to trace and value these material flows?
Material flow cost accounting, within environmental management accounting, is correct. It follows physical flows of materials and energy through processes and values the cost of non-product output such as waste, so management can see the true cost of materials bought but never sold.
- AEnvironmental management accounting using material flow cost accountingCorrect
- BBalanced scorecard customer perspective analysis
- CZero-based budgeting of the production department
- DVariance analysis of direct labour efficiency
Explanation
Material flow cost accounting, part of environmental management accounting, tracks physical flows of materials and energy and assigns costs to both product and waste (non-product output). The other options do not trace material losses in this way; zero-based budgeting and labour variances address different issues, and the scorecard customer perspective is about customers.
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