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Describe the manufacturing overhead costs which can be best allocated on the basis of Machine Hours basis ?

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Question added by Deleted user
Date Posted: 2014/08/19
Owen Gatehi
by Owen Gatehi , Head of Finance , Kapitol Services Co.

Best manufacturing overheads that can be apportioned on machine hours are:

Repair & maintenance

Electricity

Plant staff salaries & wages

Product cost per unit

Depreciation

 

Sundeep Reddy Shada
by Sundeep Reddy Shada , General Manager , Kaizen Technologies Inc. (STEAM TURBINE ENGINEERING INDIA)

Every one has a different approach toward adding overheads to the machine hour rates

my practice is to consider all possible costs and divide it on the number of machines running / month/ hour

costs include

Engineering / office staff

marketing

travel

indirect operations effecting production costs (Quality, house keeping, Uniform etc)

 

all the above mentioned costs have to averaged over the year / quarter (depending on how often you want to revise your machine hour rate).

over heads = total indirect costs/ year/ quarter) / Number of hours your machine for year / quarter.

 

i assume when you are talking about over heads you have already considered capital,interest, depreciation, tooling, direct labor, power consumption and consumables .

 

Hope this answer helps, if a complete scenario is provided we can answer better

 

Khaled Abdelrehim ACCA DipIFR CMA
by Khaled Abdelrehim ACCA DipIFR CMA , Financial Analysis Assistant General Manager , Khalda Petroleum Company

Maintenance costs, factory workshop, power supply

Muhammad Imran Baig
by Muhammad Imran Baig , Manager Supply Chain , BS Industries

Number of products made in a unify time like1 hour or1 minute, then check the shift timings, now locate the costs/expenses like, salary or wage, utility bills, raw material consumption in1 hour to produce certain number of products, depreciation rate per hour, maintenace expenses then calculate man hours as well as process hours and idle time cost.

Jagdev Chand Dogra
by Jagdev Chand Dogra , Security Executive , Johnson Matthey India PVT. LTD

We have to care the machine with time table and maintinance of machine and should use safety equipments by operator and safty guard for machine and continew inspection or audit should do.

 

MUDDASSER ALI
by MUDDASSER ALI , Manager Accounts , M/s Ghulam Muhammad & Sons (GMS (Pvt) Ltd). (Autoparts Manufacturing Concern)

Injection Moulding machine manufacturing overhead is the best example of  mavhine hours basis

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