Machine Hour Rate method of charging depreciation is useful when:

output can be effectively measured

No worries! We‘ve got your back. Try BYJU‘S free classes today!

use of asset can be measured in terms of time

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

utility of the asset can be directly related to its productive use

No worries! We‘ve got your back. Try BYJU‘S free classes today!

entire production process is mechanised

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A use of asset can be measured in terms of time
Option B is the correct option one.

Under this method, hourly rate of depreciation is calculated.
Depreciation =Cost of assets + Installation charges -Salvage value/Estimated working hours
The actual depreciation for any given period depends upon the working hours during that year..

Suggest Corrections

Similar questions

A machinery for packing processed food products is claimed to have a useful life of 10 years by the manufacturer. But the buyer of the company fears that the machine will be obsolete in the next 5 years. What is the useful life of the asset for charging depreciation ?

Q. N.Ltd, purchased machine for Rs 1,00,000 on 1.1.2012. Installation expenses were Rs 10,000. Life of the asset is 5 years at the end of which asset can be sold at Rs 5,000. Depreciation rate is 15% on WDV. Depreciation for 4th year = Rs______?______.

Q. An asset is purchased for Rs.