Advantages of Machine Hour Rate

1. With machine hour rate, we can charge almost all operating expenses on the basis of machines.

2.With the help of under absorption of machine overhead, we can find the idle time of machine. After this, we try to reduce it.

3. It is useful to increase efficiency of machine because we can used it effective way and all overheads depends on it.

4. It is very scientific method to calculate factory overhead.

5. With this, we can fastly calculate total cost of production, after this, it is very easy to calculate selling price of any product.

Now, if you are interested to watch the lecture on machine hour rate, you can see on following YouTube video.