ExpertMedium2 marksMultiple Choice
ACCA · Question 18 · Cost Accounting Techniques
A mining corporation is implementing Environmental Management Accounting (EMA). They are using 'Material Flow Cost Accounting' (MFCA). What is the primary objective of this specific technique?
A mining corporation is implementing Environmental Management Accounting (EMA). They are using 'Material Flow Cost Accounting' (MFCA). What is the primary objective of this specific technique?
Answer options:
A.
To allocate environmental overheads based on direct labor hours.
B.
To trace the physical flow of materials through the process to identify the cost of waste and emissions.
C.
To calculate the life-cycle cost of environmental cleanup at the end of the mine's life.
D.
To ensure compliance with government carbon tax regulations.
How to approach this question
Recall the definition of Material Flow Cost Accounting within EMA. It focuses on balancing inputs and outputs to highlight the cost of waste.
Full Answer
B.To trace the physical flow of materials through the process to identify the cost of waste and emissions.✓ Correct
Material Flow Cost Accounting (MFCA) is an EMA technique that traces the physical flow of materials (inputs) and balances them against outputs (good production and waste). Its goal is to highlight the true cost of waste, including the material cost and the processing costs incurred before the material became waste.
Common mistakes
Confusing MFCA with environmental life-cycle costing or traditional overhead allocation.
Practice the full ACCA MA — Management Accounting Practice Exam 4
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