Model: Machine hour rate
You are required to calculate the machine hour rate from the following:
|
Cost of machine |
40,000 |
|
Cost of installation |
4,000 |
|
Scrap value after 10 years |
4,000 |
|
Rates and rents for a quarter of the shop: |
1,200 |
|
General lighting |
400 p.m. |
|
Shop supervisor’s salary per quarter |
12,000 |
|
Insurance premium for a machine |
240 p.a. |
|
Repairs (estimated) |
400 p.a. |
|
Power 3 units per hour @ Rs. 200 per 100 units |
|
|
Estimated working hours |
4000 p.a. |
The machine occupies 1/4 th of the total area of the shop. The supervisor is expected to devote 1/6 th of his time for supervising the machine. General lighting expenses are to be apportioned on the basis of floor area.