Background: In India the health care is the largest sector. The medical equipment like MRI is  a cost center. Collecting the data of different costs and analyzing it and calculating the machine hour rate shows the performance and effective utilization of MRI service. It is useful for health care manager as a management control tool.

Materials and Methods:  The observational and empirical study was conducted in a tertiary care teaching institute, the primary data was collected through semi structured interviews with staff and secondary data from registers.MRI related cost identified. The CMHR was calculated.

Results: After analysis it was obtained, the total cost for operating the MRI was   Rs.19788186 (US$291184.26). The total number of the man hours operating   MRI  was  5040 hours in one year. The CMHR of MRI was   Rs.3926.23 (US$57.77).

Conclusion: The CMHR is an appropriate methodology in health care business to verify the effectiveness and efficiency of a diagnostic service.