Which of the following statements about traditional management accounting systems is true?

A) Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2) .
B) Where environmental costs exist, there is very little reporting of environmental costs at the lower levels (tiers 1 and 2) .
C) Where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5) .
D) Where environmental costs exist, it is common to find some reporting of environmental costs at the lower levels (tiers 1 and 2) AND where environmental costs exist, there is very little reporting of environmental costs at the higher levels (tiers 3, 4 and 5) .

Question

youdelka saintfort · Accepted Answer

Final Answer : D, Explanation :  Traditional management accounting systems typically focus on financial performance measures and often do not take into account environmental costs. However, where environmental costs do exist, it is common to find some reporting of these costs at the lower levels (tiers 1 and 2) where the costs are most directly incurred. At the higher levels (tiers 3, 4, and 5), there is generally very little reporting of environmental costs, as these costs are often indirect and can be difficult to allocate to specific products or activities. Therefore, option D is the correct answer.

Definitions

Learning Objectives

Learning Objectives

Related questions