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Hello Sir, hope you’re doing good.
How does Environmental costing ”reduce the potential for cross subsidization of environmentally damaged products.”Can you please explain this advantage to me, sir?
Thank you
I would guess that the statement uses the word ‘damaging’ rather than ‘damaged’ (if it doesn’t then it should 🙂 )
With environmental costing we look at the environmental costs for each product separately and so we can see whether each separate product is profitable or loss-making.
Without environmental costing the danger is that we just look at the overall profit of all products in total, and therefore don’t know if one of the products is actually making a loss because the other products are making a profit.
Ooops, I’m extremely sorry for the typo.. And thanks a million for the clarification sir!!
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