Model: Machine-hour-rate determination
Calculate the machine hour rate for recovery of overheads for a group of four machines from the following data:
Original cost of four machines Rs. 1,53,600.
Depreciation@ 10% per annum – straight line method.
Maintenance cost – average Rs. 16 per day of 8 hours for the group of machines.
Power – 50 paise per running hour per machine.
Supervision for the machine group – Rs. 1,280 per month.
Allocation of building depreciation for the four machines on a floor area basis@ Rs. 160 per month.
Share of manufacturing overheads – Rs. 480 per month for the group.
Normal working days in a year – 300 days.
Normal idle time – 20%.
Normal running – 1 shift of 8 hours.