Q.Machine hour rate is a method which is used for :

Machine hour rate is a method of absorption of overhead.

Overhead accounting moves through stages: collection → allocation → apportionment → re-apportionment → absorption. Absorption means charging the overhead of a cost centre to the cost units passing through it.

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Power is a running charge, not a standing charge — option (a).

In computing a machine hour rate, expenses are split into:

The answer is the machine hour rate.

When production is largely machine-based, machine time is the main cost driver of factory overheads (power, depreciation, repairs). Absorbing overhead on the machine hour rate - overhead cost per machine hour x machine hours used by the job - gives the most accurate charge in such a department, whereas a labour …