Total cost to reduce carbon emissions Fine in 2019 if EPA guidelines are not met $10 per metric ton reduced in 2019 below 500,000 metric tons $300,000 Apex Management has chosen to use Kaizen budgeting to achieve its goal for carbon emissions. 1. If Apex reduces emissions by 1% each quarter, beginning with the second quarter of 2018, will the Required company reach its goal of 475,000 metric tons by the end of 2019? 2. What would be the net financial cost or benefit of their plan? Ignore the time value of money. 3. What factors other than cost might weigh into Apex's decision to carry out this plan?
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Kaizen budgeting for carbon emissions. Apex Chemical Company currently operates three manufacturing plants in Colorado, Utah, and Arizona. Annual carbon emissions for these plants in the rst quarter of 2018 are 125,000 metric tons per quarter (or 500,000 metric tons in 2018). Apex management is investigating improved manufacturing techniques that will reduce annual carbon emissions to below 475,000 metric tons so that the company can meet Environmental Protection Agency guidelines by 2019. Costs and benets are as follows:
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