Title: Integrating activity-based costing and environmental cost accounting systems: a case study

Authors: Wen-Hsien Tsai, Thomas W. Lin, Wen-Chin Chou

Addresses: Department of Business Administration, National Central University, Jhongli, Taoyuan 320, Taiwan. ' Leventhal School of Accounting, Marshall School of Business, University of Southern California, Los Angeles, CA 90089, USA. ' Department of Accounting, Yu Da University, Chaochiao, Miaoli 361, Taiwan

Abstract: The integration of activity-based costing (ABC) and environmental cost accounting (ECA) systems provides companies with more accurate information to make both well-rounded and effective decisions. The purpose of this study is to propose an effective approach to integrate both ABC and ECA systems. A case study analysing process is used to compare the traditional accounting system and the ABC system for allocating environmental costs. The results enable managers not only to understand financial information regarding the activities for environmental protection and the percentage of environmental costs in the overall product costs but also to make more objective and accurate decisions.

Keywords: ABC; activity-based costing; ECA; environmental cost accounting; LCEC; life cycle environmental cost; green accounting; environmental costs; environmental protection.

DOI: 10.1504/IJBSR.2010.030774

International Journal of Business and Systems Research, 2010 Vol.4 No.2, pp.186 - 208

Published online: 05 Jan 2010 *

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