Center for Advancing Accounting

Costing Breakage: A Case Study on Implementing Waste Reduction to Foster Sustainability

• In Event: Cases on ESG and Sustainability

Abstract

This case instructs students on how to implement sustainability into the production life cycle of product manufacturing. First students draw from the Hart (2005) approach to corporate sustainability as a foundation for designing sustainability strategies. Student then learn the weighted average process costing approach to computing waste due to spoilage. Using this costing approach, students are guided in reimagining sustainable solutions to spoilage during production and accomplish the application of costing interventions in their computations. Students then perform a budget analysis comparing the company’s performance pre and post intervention. Reflections will enable students to propose potential long-term measures the company can carry out to continue to manage the product life cycle and foster stakeholder management. The case is intended for upper level accounting students who have completed introductory financial courses such as financial and managerial accounting, and have knowledge of budgeting and financial statement analysis.

Author

• Lucy Uche Diala, California State University, Fresno