machinehours

Machinehours, also written as machine-hours, is a unit of measure used in manufacturing and cost accounting to quantify the amount of time a machine spends operating for production. One machine-hour equals one hour of machine operation, regardless of the number of operators or other resources involved. The metric is used to assess capacity, plan production, and allocate overhead costs.

In cost accounting, machine-hours are often used as the allocation base for manufacturing overhead. A predetermined overhead rate is set per machine-hour, and applied to production based on the actual machine-hours incurred. This approach reflects how much of the factory's indirect costs are consumed by machine use. Managers also compare actual machine-hours to standard machine-hours planned for a production run to calculate efficiency and utilization variances.

Calculation is straightforward: total machine-hours in a period equal the sum over all machines of the time each machine was in operation. In batch or serial production, machine-hours per batch equal the running time multiplied by the number of machines in use. Maintenance, downtime, and changeovers reduce effective machine-hours and can distort output if not accounted for.

Limitations: machine-hours do not directly capture output rate when machines vary in speed, or account for downtime beyond planned maintenance. They should be interpreted alongside factors such as throughput, scrap, and uptime. In modern manufacturing, machine-hours are often complemented by line-level measurements and overall equipment effectiveness (OEE) to provide a fuller view of performance.