ABSORPTION RATE

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December 31, 2019 at 11:20 am #556563
sadafwaheed1
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Hey sir ! Can you please explain me .. if in question both machine and labour hours are given .. what should we consider in calculating absorption rate ?
December 31, 2019 at 5:40 pm #556591
John Moffat
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Whichever is used most.

If most of the work is done by machine hours, then machine hours is the most relevant.
If most of the work is done by labour, then labour hours are more relevant.
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