The overhead expenses of a factory are allocated on the machine-hour method. You are required to calculate
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The overhead expenses of a factory are allocated on the machine-hour method. You are required to calculate the hourly rate for a certain machine from the following information:
Cost Rs 58,000 Estimated scrap value Rs 3,000 Estimated working life 20,000 hours Estimated cost of maintenance for whole life (machine) Rs 12,000 Power used for machine Rs 1 per hour Rent per month (10% for this machine) Rs 1,500 Normal machine running hours during a month: 180 Standing charges other than rent, rates etc. per month Rs 200
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