Environmental costing (2026 syllabus)
You’ll learn how to classify environmental costs using the prevention, appraisal, internal failure and external failure framework, and why this matters for CIMA P1 Management Accounting.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Environmental Costing in CIMA P1
- 1:03 Why Environmental Costs Matter
- 2:07 Conformance and Non-Conformance Costs
- 3:23 Four Environmental Cost Categories
- 5:38 Prevention Versus Failure Costs
- 7:06 Linking Costs to Activities
- 9:00 Fernbrook Bakery Classification Exercise
- 10:44 Interpreting Environmental Cost Data
- 11:10 Evaluating Prevention Investment
- 13:53 Key Exam Distinctions and Practice
About this lesson
You’ll also learn to distinguish between internal and external failure costs, link costs to the activities that cause them, and use environmental cost data to support management decisions. Using the Fernbrook bakery example, the lesson covers environmental cost reports, investment appraisal, payback and avoided failure costs. You’ll see how prevention spending, such as recyclable packaging and improved effluent treatment, can reduce larger external failure costs including landfill tax, producer responsibility charges and environmental fines.
Duration: 16m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the P1 Objective Test course
All 104 video lessons, timed mock exams marked instantly with an explanation for every question, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in