I have come across this question and am having difficulty working out the "Energy" costs.
Since Energy costs here are fixed costs I thought it would be pretty simple.
This is how I got to my answer which happens to be incorrect, but I have tried every other way and cannot get to the correct answer and so would greatly appreciate some guidance.
I subtracted 3% from the 123,600 since there was an allowance for 3% which I thought would get me to the original energy cost.
= £123 600 - £3708 = £119,892
I then subracted 1% as there was a 1% decrease in energy costs.
= 119,892 - 1198.92 = 118,693.08
I then assumed I would have to add that extra 3% allowance again which brought me to...
118,693.08 + 1186.9308 = 119 880.01
So the answer I arrived at was £119, 880.01
I visted the answers section and the correct answer is in fact £118,800.
I have absolutely no idea how to get to this answer and have missed something key to this topic, I would greatly appreciate any help, thank you!
