Bills and Charges

Electricity Bills:

Electricity bills are calculated based on the number of units of electricity used. Also, there is usually a Standing charge or Demand charge, and VAT is charged. The table below gives typical charges.

Cost per unit	₦5
Standing charge	₦450 per quarter
VAT	5% of the total bill

Example 1.7.1:

A company’s electricity meter reading changed from 56 745 to 61 876 in one quarter. Use the table above to calculate the company’s electricity bill.

Solution

First, calculate the number of units used in one quarter:

Number of units used = 61 876 – 56 745

Number of units used = 5 131

Next, find the cost @ ₦5 per unit

Cost at ₦5 per unit = ₦5 × 5 131

                                = ₦25 655

Next, Calculate the total charges by adding the standing charge to the cost @ ₦5 per unit

Standing charge = ₦450

cost @ ₦5 per unit = ₦25 655

Total charges = ₦25 655 + ₦450

                           = ₦26 105

VAT is 5% of the total charge

VAT = 5% × ₦26 105

VAT = \( \frac{5}{100}\scriptsize \: \times \: ₦26 105 \)

VAT = \( \scriptsize 0.05 \: \times \: ₦26 105 \\ \scriptsize = ₦1305.25\)

Total Bill, incl (+) VAT = ₦26 105 + ₦1305.25

                               = ₦ 27410.25

                               = ₦ 27410 to the nearest naira