A company has a winding machine in a specific cost centre.The production overhead for the cost centre is £875,000,the machine is expected to operate for 2,500 hours per annum.What is the machine hour rate?

Question

Quizplus · Accepted Answer

The machine hour rate is calculated by dividing the production overhead by the number of machine hours. In this case, the production overhead is £875,000 and the machine is expected to operate for 2,500 hours per annum. Therefore, the machine hour rate is £875,000 / 2,500 = £350.

A Company Has a Winding Machine in a Specific Cost