Explain the computation of machine hour rate with the help of an example.

Machine hour rate is an important concept in cost accounting, particularly for manufacturing companies. It helps in determining the cost associated with using a machine per hour. This rate is essential for calculating the cost of production, as it allocates the machine’s operating costs to the products or services being produced. The machine hour rate includes both fixed and variable costs incurred in the operation of a machine, such as depreciation, maintenance, power consumption, and other expenses.

To compute the machine hour rate, the following steps are typically followed:

1. Determine the total costs: This includes both fixed and variable costs associated with operating the machine. Fixed costs are the costs that do not change with the level of machine usage (e.g., depreciation, insurance), while variable costs fluctuate depending on the machine's usage (e.g., power consumption, repairs, and maintenance).

2. Fixed ____ ____ _________ ____ ___.
________ __________ __________ __________ ________ _____ __________ __________ _____ ________.
________ ______ _______ _____ ___ _______ _________ ________ ____.
________ __________ ________ _____ _____ _____.
_________ ________ ___ _______ ____ _________ ___ ________.
______ __________ _____ _________ ______ ____ ______ ____ ___ ___.
___ ______ ____ ___ _____ ________.
___ __________ _________ _________ _________ _______ ______.
_____ ______ ________ __________ _______ _________ ____ ___ ______.
____ _________ _______ _______ ___ __________ _________ ________ ____ _______.
_________ _________ ______ __________ _________ _____ ____ _______ ___ _________.
___ ____ ________ ______ _______ ___ _____ ____ _____ _____ _______ __________.
____ ____ __________ ____ _________ ___.
___ ____ ___ _________ __________.
_________ ____ ___ ______ ___ ___ ________ ____ _________ _______ _______.
________ ______ __________ ____ __________ _________ __________ ______ ___ ________ _______.
_____ _____ ________ _______ ________ ______ ________ ______.
__________ ____ ______ _________ ____ ____ __________ ____ _________ _________ _____ _________.
____ __________ _____ ______ _______ ____ _____ ______ ______ ______ _________ __________.
_________ ______ _______ _____ ____ ___ _______.
_____ _________ _________ _______ ___ ____ __________ __________ _____ ______ ________ ___.
___ ____ ___ ___ ______ ______ _______ _____ ______ _________.
_______ _____ ___ ________ ____ __________ _____ ______ _____.
________ _______ __________ _____ ________ _____.
_________ ______ _______ ___ ______ _____ _________ ____ _____ ___ __________ _______.
______ _____ _______ _____ ____ ____ ___ ________ ________.
____ ________ _________ _________ ____ ________ ___ ____ _____.
___ ________ _____ _________ ______ ___ ______ ______.
____ __________ _______ ______ ______ __________ _____ ___ ______ _________ _________.
_______ _________ _____ _______ ________ ________ _________ ____.
___ ___ ___ ________ ________ ________ _____ ________.
_______ _____ ______ ____ ____ ________ _______ _________.
________ __________ ___ __________ ______ _______ __________ ___ ____.
___ _______ ________ ______ __________ __________ _________ _________.
_______ ________ _________ _________ __________ _________ ____ ___ ____ ________ _______.
_______ _________ _____ ____ ___ ____ ______ _________ _______ _______.
____ _______ ___ ____ ______ _______ ___.
______ ______ _____ _________ __________ ______ ___ _______ ____ _____ _______ ____.
____ _______ ________ ______ __________ ___ ___ __________ ___ ___ _______.
_________ _________ ______ __________ _____ ____ ________ _____ ________ _____.
_____ ___ _____ ________ _________ _____ _______ _________ __________.
____ _________ ____ ________ ___ ______ ________ _____ ___ ______ ________.
_____ ________ _____ ______ ________ ___ ______ ____ ____ ________ __________ _________.
__________ ____ ______ _______ ___.
__________ ________ ______ _______ _____ ___.
______ ____ ______ _________ _________ __________ ________ _____ ________ ________.
________ __________ ______ _______ ___ __________ ___ __________ __________.
Get Full Answer on WhatsApp