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EMA advantages

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › EMA advantages

  • This topic has 1 reply, 2 voices, and was last updated 5 years ago by John Moffat.
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  • September 12, 2020 at 1:16 pm #585309
    Noah098
    Member
    • Topics: 935
    • Replies: 352
    • ☆☆☆☆☆

    Sir one of the advantages of environmental costing is – “it reduces the potential for cross- subsidisation of environmentally damaging products. ”

    I do not understand this statement one bit. Could you perhaps explain it with an example?

    Sorry for bothering you so much sir!

    September 12, 2020 at 3:47 pm #585349
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54812
    • ☆☆☆☆☆

    Cross-subsidisation is when the profits of one product ‘hide’ losses on another product.
    When environmental costs are charged properly to the relevant products there is less chance of this happening.

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