The finance and tax questions manufacturers ask most

How should power and depreciation be allocated to product cost?

Set up cost objects first, then split costs into the part that moves with volume and the part that does not: allocate energy to work orders by metering or by equipment power times hours, and depreciation by the products each machine actually serves, rather than spreading everything by volume.

The cost of spreading everything by volume: large orders carry too much cost, small orders all look profitable, and pricing follows the error.
Yidao's own measurement: in twelve months of daily data at an electroplating plant in Jiangsu, 50.9% of costs did not move with volume; when output rose 4.6 times, electricity per unit fell 51%.
The data usually exists already: the accounting ledgers plus work orders, hours, output and energy records, with no new sensors.

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