Accounting · Environmental Management Accounting
A company identifies the following environmental performance costs: 1. Investment in a high-efficiency water filtration system to clean industrial wastewater before discharge. 2. Legal fees and fines paid following an accidental chemical leak. 3. Regular testing of air quality within the factory for health and safety compliance. 4. Training sessions for staff on waste reduction and resource efficiency. According to the Hansen and Mendoza Environmental Management Accounting (EMA) framework, how are these costs sequentially classified?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 11: Internal failure cost; 2: External failure cost; 3: Detection cost; 4: Internal failure cost.
- 21: Detection cost; 2: External failure cost; 3: Internal failure cost; 4: Prevention cost.
- 31: Internal failure cost; 2: External failure cost; 3: Detection cost; 4: Prevention cost.✓
- 41: Prevention cost; 2: Internal failure cost; 3: Detection cost; 4: Prevention cost.
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1: Internal failure cost; 2: External failure cost; 3: Detection cost; 4: Prevention cost.
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