Investigate and report on an organisation\'s method of allocating electricity co

Question

Investigate and report on an organisation's method of allocating electricity costs You can use any organisation with which you are familiar. Consider the following: 1. Does the organisation allocate the total costs of electricity? 2. If so, what is the basis for the allocation of the total cost of electricity incurred for a period? 3. Calculate the percentage and cost of the total cost for each allocation Complete a report that you could provide to management about your findings and include within it an executive summary. Make recommendations to management about the appropriateness of the methods of allocating costs and provide reasons for your conclusions within the report. 40 marks

Explanation / Answer

Executive Summary :- In relation to the drafting of ABC Ltd, the methods of allocating electricity costs is being reviewed and further the best possible ways for allocation is being discussed.

The focus is on considering the following issues :-

What costs allocation method of total electricity cost is most appropriate.

As verified from records of ABC Ltd, yes it can be vouched that company is allocating the total cost of electricity to various business segments.

The basis of allocation of total electricity costs for a period is is as under and as observed is correct:-

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