PPT - Machine Hour Rate B Com Notes | EduRev

Cost Accounting

B Com : PPT - Machine Hour Rate B Com Notes | EduRev

 Page 1


Machine Hour
Rate 
Page 2


Machine Hour
Rate 
Meaning
• “The Machine Hour Rate is an actual or 
predetermined rate of cost apportionment for 
overhead absorption”
Page 3


Machine Hour
Rate 
Meaning
• “The Machine Hour Rate is an actual or 
predetermined rate of cost apportionment for 
overhead absorption”
Calculation
• “Machine hour Rate is calculated by dividing the 
cost to be apportioned or absorbed by the number 
of hours for which a machine or machines are 
operated or expected to be operated”
• Machine Hour Rate = Total Factory Overheads
Total Machine Hours
Page 4


Machine Hour
Rate 
Meaning
• “The Machine Hour Rate is an actual or 
predetermined rate of cost apportionment for 
overhead absorption”
Calculation
• “Machine hour Rate is calculated by dividing the 
cost to be apportioned or absorbed by the number 
of hours for which a machine or machines are 
operated or expected to be operated”
• Machine Hour Rate = Total Factory Overheads
Total Machine Hours
Basis of Apportionment 
• Rent, Rates, Taxes, etc.
• Depreciation
• Lighting
• Heating
• Power
• Repairs and Maintenance
• Supervisory Expenses
• Labour Welfare Expenses
• Insurance
• Lubricating Oil, Cotton Waste and Consumable Stores
• Interest included in Hire-Purchase.
Page 5


Machine Hour
Rate 
Meaning
• “The Machine Hour Rate is an actual or 
predetermined rate of cost apportionment for 
overhead absorption”
Calculation
• “Machine hour Rate is calculated by dividing the 
cost to be apportioned or absorbed by the number 
of hours for which a machine or machines are 
operated or expected to be operated”
• Machine Hour Rate = Total Factory Overheads
Total Machine Hours
Basis of Apportionment 
• Rent, Rates, Taxes, etc.
• Depreciation
• Lighting
• Heating
• Power
• Repairs and Maintenance
• Supervisory Expenses
• Labour Welfare Expenses
• Insurance
• Lubricating Oil, Cotton Waste and Consumable Stores
• Interest included in Hire-Purchase.
Presentation/Computation
• Standing Charges
• Machine Charges
Read More
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