Page 89 - Statement of Intent 2015/16
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Cost of Service Reports
The cost of service statements represents the cost of providing the outputs less the revenue.
Cost Allocation
The net cost of service for each significant activity is arrived at using the cost allocation system outlined below.
Cost Allocation Policy
Direct costs are charged directly to output classes. Indirect costs are charged to output classes based on cost drivers and related activity and usage information.
Criteria for Direct and Indirect Costs
Direct costs are those costs directly attributable to an output class. Indirect costs are those costs that cannot be identified in an economically feasible manner with a specific output class.
Cost Drivers for Allocation of Indirect Costs
The cost of internal services not directly charged to outputs is allocated as overheads using appropriate cost drivers such as actual usage, staff numbers and floor area.
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