ABSTRACT
Classic Crafts Corporation Ltd (hereafter Classic Crafts) examines the application of environmental management accounting (EMA) techniques in a medium-sized saa paper-manufacturing company in Thailand. The particular decisions addressed involve the potential for converting waste into a by-product and a related investment to improve water quality. Once the non-product costs of saa paper production are made apparent through environmental costing (Figure 10.1: Box 7), the decision to use low-quality wastepaper as an input to the manufacturing process is questioned. Analysis reveals that an attractive alternative is to sell this low-quality paper as a by-product and buy cheaper material as input to the high-quality paper. The analysis is initially based on routinely generated environmental cost accounting information (Figure 10.1: Box 1) from the company’s job cost sheets, which is founded on an assessment of the routine operating material and energy flows (Box 9). These sheets link job costs with units of output and, once costs are corrected, indicate a strong incentive to improve eco-efficiency levels as the high costs of waste materials is revealed. An additional decision involves investments identified to improve water quality (Figure 10.1: Box 8).
