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Contribution/Unit

( COntribution / Hour) CPH = ------------------------

No. of M/c Hours/ Unit

CPH = ?

Contribution / Unit = 95

No. of M/c Hours (M/c Availability hours /Day) = 21.33

No. of M/c Hours / Unit = 21.33 * 5

For E.g.

95

CPH = -------- = 89.07%

106.65

Saagar Bhavsar

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Q: What is a company that uses contribution per machine hour formula?
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What is the contribution per machine hour formula?

The contribution per machine hour is the contribution per unit divided by the number of machine hours per unit.


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Contribution margin for per machine hour is as follows:total contribution margin / number of machine hours = contribution margin per hour


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Is depreciation a direct or indirect cost?

Depreciation can be either a direct cost or an indirect cost, or it can be both direct and indirect.Let's illustrate this with the depreciation of a machine used in Department 23 of a manufacturer. The depreciation on that machine is a direct cost for Department 23. It is direct because it is traceable to Department 23 without any allocation.The depreciation of this same machine will be an indirect cost of the products manufactured with that machine. It is indirect because the depreciation is allocated to the products. Perhaps the machine in Department 23 has depreciation of $50,000 per year (cost of machine of $500,000 divided by 10 years of useful life). The $50,000 of annual depreciation is then assigned or allocated to products based on the number of hours that products use the machine. For example, if the manufacture expects 20,000 machine hours of use in the current year, then it assigns or allocates $2.50 ($50,000/20,000) per machine hour to each product using the machine. If Product #189 requires one hour of this machine's time, Product #189 will have $2.50 as part of its indirect costs. Indirect manufacturing costs are also referred to as manufacturing overhead, factory overhead, or burden.


Do CPA's get paid by the hour or by the salary?

An independent CPA may choose to charge by the hour or the work involved. A CPA working for an accounting firm or other company gets paid a salary normally.

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