What are the advantages of machine hour rate?

The Advantages of Machine Hour Rate in Cost Accounting.

  • It helps to compare the effective deficiencies and cost off operating different machines.
  • It brings light to the existence of idle time of machine.
  • It is most scientific practical and accurate method of recovery of manufacturing overheads.
  • It provides useful data for estimating cost of production setting of standards and for fixing selling prices for quotations.
  • It enables management to decide how far the machine work is preferable over manual work.