1.1 Background of Full Cost Accounting
Environmental pollution is more serious day by day. Boer, Estes and Klammer (1994, p.61) stated that the business community has a great challenge from environmental costs. In 90’s century, the businesses needed to increase in environmental cost (Zachry, Gaharan and Chaisson 1998, p. 72). So the business wanted to control the environmental cost. Tetra Tech EM Inc. (1997, p.1) stated municipal solid waste (MSW) from Florida was provided, and full cost accounting (FCA) could identify, assess and report the costs of solid waste management.
1.2 Definition of Full Cost Accounting
Boer, Estes and Klammer (1994, p.61) defined that FCA ...view middle of the document...
2.11 Cost rather than outlays
An outlay is an expenditure of cash to acquire or use a resource. A cost is the value of the resource as it is used. For example, an outlay is made when a machine is purchased, but the cost of the machine is incurred over its useful life of 5 years. The cost of the machine must be allocated over a period over a period of time because every year of its use contributes to the depreciation of the machine’s value.
2.12 Hidden costs
With FCA, the value of goods and ser-vices is reflected as a cost even if no cash outlay is involved. For instance, a firm to purchase equipment as it has value, even though the firm did not pay for it in cash, it should be valued in an FCA analysis.
2.13 Overhead and indirect costs
FAC accounts for all overhead and indirect costs, including those that are shared with other public agencies. Overhead and indirect costs might include legal services, administrative support, data processing, billing, and purchasing. It is also contain fixed overhead, fixed administration...