To distribute the energy cost to the product cost, it is not enough to divide the electricity bill by the number of products. First determine which production period the invoice belongs to, which consumption is directly measured and which part is shared. Then allocate the joint production energy to the products with an explainable key and reconcile the total with the invoice.
Distribute Metered Consumption Directly, Common Consumption with Appropriate Switch
If there is a product‑specific counter or machine consumption, link it to the relevant product or production order. For shared consumption such as compressor and production area lighting, distribute it with a consistent key like machine hours or power‑weighted operating time. Keep non‑production portions such as administrative use separate. Calculate unit product energy cost by dividing the total cost allocated to the product by the appropriate production quantity in the same period
Which Electricity Expense Includes in the Product Cost?
The first job is to match the reading start and end dates of the invoice with the production records. If the invoice is issued in the middle of the calendar month, do not blindly write down the consumption of two periods in a single month; counter records on the period boundary or match the documented periodization method. The production line, the common installation of the production area and the administrative office should be monitored from separate meters if possible.
As explained by EMRA, the electricity price is not just the active energy price; Network fee, taxes and other items may also be included. Create the expense pool to be distributed based on the accounted items of the invoice. Do not automatically add deductible VAT to the product expense; Determine with the accounting policy and consultant of the business whether non-refundable taxes and different invoice items will be included in the cost. The following 4 TL/kWh is only a sample period average and is not an official tariff or price recommendation.
Consumption used for production but not measured separately on a product basis does not mean that the expense has disappeared. On the other hand, administrative office use should not automatically be attributed to the product. KGK's TMS 2 Inventories standard addresses the systematic distribution of conversion costs and the evaluation of general administrative expenses unrelated to production outside the inventory cost. Verify classification according to the accounting framework to be applied.
How to Distribute Electricity Expenses to Products?
Fix the kWh on the invoice and the net TL amount to be distributed for the same period. Show non-production consumption separately.
Match submeter readings for the product, line or production order. If there is no meter, do not present the estimated value as measured.
Choose a key such as machine time for common consumption of the production area. If machine powers are different, consider the kW × hour approach.
Compare the kWh and TL totals distributed to products and excluded from production with the main meter and expense pool.
Product energy expense = (directly measured kWh + kWh allocated from co-production) × TL/kWh per period
Energy expense per product = energy expense allocated to the product ÷ number of eligible products produced in the period. If there are multiple production orders or semi-finished product stages, link the numerator to the relevant orders instead of just adding it up to the final product code.
Two-Product Example: How to Share a 10,000 kWh Bill?
Products A and B are produced in the same billing period. All amounts and amounts below are assumed to illustrate the method; It is not actual billing schedule or actual business data. The direct consumption of the two lines was measured from the submeter. There are no product-based meters for common consumption in the production area; administrative office use was measured separately.
Total consumption seen on the main meter for the same reading period.
However, for the example, the default is the net expense with accounting scope determined.
40,000 TL ÷ 10,000 kWh; this is not a current electricity tariff.
Consumption seen directly on the lower meter of line A.
Consumption seen directly on the submeter of line B.
Joint consumption in the production area; will be distributed because it is not measured on a product basis.
In this example, consumption is considered to belong to the administrative office and is not charged to the products.
First, reconcile kWh: 3,000 + 2,000 + 3,000 + 2,000 = 10,000 kWh. The first 8,000 kWh relate to production; the last 2,000 kWh are out of production in this example. Thus, 32,000 TL of the 40,000 TL expense is allocated to the production pool and 8,000 TL is allocated to non-production use.
Machine Clock Switch for Common 3,000 kWh
In this example, line A worked for 200 hours and line B worked for 100 hours. It is assumed that the lines' utilization of the shared installation is similar per hour. Therefore the common 3,000 kWh goes to A in the ratio 200:100 2,000 kWh, to B 1,000 kWh It is shared as. These are not values measured by meter on a product basis, are the estimated distribution shares.
Common share A: 3,000 × 200 ÷ 300 = 2,000 kWh
Common share B: 3,000 × 100 ÷ 300 = 1,000 kWh
If the power needs of lines A and B are significantly different, using operating hours alone will bias consumption. In such a case, weight the measured or reliably determined kW value by the operating hours; Also check the actual reason for use of common equipment such as the compressor. Sub-meter investment reduces the estimated distribution share if possible.
3,000 kWh measured + 2,000 kWh common share
5,000 kWh × 4 TL = 20,000 TL20,000 TL ÷ 1,000 units = 20 TL/piece energy expense.
2,000 kWh measured + 1,000 kWh shared
3,000 kWh × 4 TL = 12,000 TL12,000 TL ÷ 400 units = 30 TL/unit energy expense.
Final check with invoice
A 5,000 kWh + B 3,000 kWh + 2,000 kWh out of production = 10,000 kWh. A 20,000 TL + B 12,000 TL + non-production 8,000 TL = 40,000 TL. No undistributed or doubly charged energy remains.
This results in 20 TL/piece for A and 30 TL/piece for B. is the energy share; It is not the total cost of the product. Writing equal production costs of 16,000 TL each for two products would hide the consumption difference. For general product cost items review the product cost calculation guide and examine it.
What Errors to Avoid in the Account?
Confusing the invoice period with the production month
If the meter reading interval is different, do not calculate the unit cost without bringing the energy expense and production amount to the same period.
Presenting the common numerator as a measurement
Mark the kWh from the sub‑meter and the kWh estimated from machine hours separately in the record and report.
Charging the same electricity twice
If the energy machine hour cost already includes it, do not add the same invoice amount to the product account a second time. Machine hour cost letter explains the scope separately.
Blindly dividing stationary item by kWh
If there are significant charges on the invoice that are not proportional to consumption, evaluate them in a separate expense pool and with the appropriate key; A single average price is not sufficient in all cases.
Compare the estimated energy share used in the quote with the amount realized at the end of production. Whether the deviation is due to price, consumption, time or product mix Guide to standard and actual cost difference You can watch via .
Frequently Asked Questions
How to calculate electricity expense per product?
Add the directly measured kWh consumption of the product and its share from joint production, evaluate it with the periodic expense and divide it by the number of eligible products in the same period.
What to do if there is no submeter?
Use a documented estimate such as machine power × actual operating time. Do not present this result as a measurement and check the difference against the total main meter reading.
Is the entire electricity bill charged to the products?
No, it is not installed directly. The accounting scope of non-production use and expense should be separated. Joint production consumption requires an appropriate distribution switch.
What if the energy cost is already included in the machine hour?
Adding the same amount again to the product cost is double counting. Decide consistently, with a single method, whether you will track energy within the machine hour or in a separate expense pool.
Verify Invoice Items and Cost Policy
of EMRA commercial electricity consumption description and invoice components information explains different cost items. KGK's TMS 2 Stocks standard It provides a framework for the systematic distribution of production costs. The sample account is not a tariff, tax or business-specific accounting view.
To relate the distributed energy expense to the total cost of the product in the production cost calculation guide examine cost items; Do not reload the amount included in the machine hours.
Which product consumes how much energy?
Determine the need to compare counter data, production orders and incurred expenses in the same period. For the scope of production records Korgün ERP production solution and examine it.