Professional Documents
Culture Documents
Format To Computation of Machine Hour Rate
Format To Computation of Machine Hour Rate
If supervisor/foreman’s time devoted for the machine is given, salary /wages is calculated
on the basis of time devoted.
If area occupied by the machine is given, rent and lighting are calculated on the basis of
area occupied.
Setting up time non productive is deducted while calculating Machine Hours/ Effective
machine hours.
ABSORPTION OF OVERHEADS
1. Percentage methods
Production overhead (or) Factory overhead (or) overhead chargeable to the department * 100
Direct Materials
Production overhead (or) Factory overhead (or) overhead chargeable to the department * 100
Production overhead (or) Factory overhead (or) overhead chargeable to the department * 100
Prime Cost
Production overhead (or) Factory overhead (or) overhead chargeable to the department
Production overhead (or) Factory overhead (or) overhead chargeable to the department