machine hour rate

machine hour rate

a COST RATE which is used in ABSORPTION COSTING to charge the OVERHEADS of a department or COST CENTRE in the cost of a product or job. It is usually used for those departments or cost centres which are highly mechanized, and is computed by dividing the budgeted overheads which have been assigned to the department or cost centre by the estimated total number of machine hours for the period, to arrive at the rate per machine hour. The overhead charge for any product or job will depend upon the number of machine hours required for its production. See also ABSORPTION.
References in periodicals archive ?
Table 4.--Harvest 1 machine hour rates and contract rate scenarios (one-person manual operation).
In contrast to a flexible 5-axis milling machine, lower initial costs and machine hour rates affirm the implementation of the MHP process on this kind of industrial robots.