Question:
From the data given below, calculate the machine hour rate:
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Rs.
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Rent of the department (Space occupied by machine1/5th of the department
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780 p.a.
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Lighting (No. of men in the department 12, two men engaged on this machine)
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288 p.a.
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Insurance, etc.
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36 p.a.
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Cotton, waste, oil, etc
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60 p.a.
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Salary of foreman
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6,000 p.a.
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One fourth of the foreman's time is occupied by the machine and the reminder equally by other two machines.
The cost of the machines is Rs. 9,200 and it has an estimated scrap value of Rs. 200. It is ascertained from the past experience that
1. the machine will work for 1,800 hours p.a.
2. it will incur the expenditure of Rs. 1,125 in respect of repairs and maintenance over its life time.
3. it consumes 5 units of power per hour at the cost of 6 paise per unit.
4. the working life of the machine will be 18,000 hours