The following annual charges are incurred in respect of a machine in a shop where manual labour is almost nil and work is done by means of five machines of exactly same type of specification.

(i) Rent and rates (proportional to the floor space) for the shop Rs 4,800

(ii) Depreciation on each machine 500

(iii) Repairs and maintenance for the five machines 1,000

(iv) Power consumed (as per meter)

@ 5 p. per unit for the shop Rs 3,000

(v) Electric charges for light in the shop Rs 540

(vi) Attendants: There are two attendants for the five machines and they are each paid Rs 60 per month.

(vii) Supervision: For the five machines in the shop there is one supervisor whose emoluments are Rs 250 per month

(viii) Sundry supplies for the shop Rs 450

(ix) Hire purchase instalments payable for the machine (including Rs 300 as interest): 1,200 The machine uses 10 units of power per hour. Calculate the MHR for the machine for the year.

Note: (1) Calculations are made up to the fourth decimal to minimise the effect of approximations.
(2) When attendants’ salary or wages is also included in the calculation, the MHR is called ‘comprehensive MHR’ or ‘composite MHR’.