Margaret River Winery has developed the following analysis of its environmental costs and revenues for the last financial year:
Employee training cost to improve the management of effluent disposal…………..$5,600
Scrap value of broken bottles……………………………………………………….(12,560)
Cleaning of exhaust fans……………………………………………………………….4,891
Fine for minor leakage of untreated waste into the Margaret River…………………12,569
Inspection of Drainage systems…………………………………………………………….15,421
Restoring land where waste wad dumped in the 1980s…………………………….16,986
Study tour to the Barossa Valley to select new equipment to reduce wastes ………..4,769
Developing air pollution monitoring systems…………………………………………14,897
Lost sales due to poor environmental reputation………………………………………3,787
Workers compensation claim due to poor environmental practices…………………..5,652
Obtaining ISO 14001 certification………………………………………………………..67,908
Total…………………………………………………………………………………..$139,919
Total costs for the plant were $1 309 670 per annum.
Required:
1. Classify each of the costs identified above as Tier 1 to Tier 5, as shown in Exhibit 17.5
2. Suggest two examples of environmental cost that could be classified as Tier 3, Tier 4 and Tier 5 for may have been overlooked.
3. For each of the six costs identified in requirement 2, outline steps that managers of management Fiver Winery could implement to reduce those cost.
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