4,000 y50 - Standing charges: Factory rent (9,60,000/80,000 sq. ft.) x 5,000 sq. ft. 260,000 Heat and gas (4,50,000/15 machines) 30,000 Supervision (12,00,000/15 machines) 80,000 Depreciation (R4,50,000 - 250,000)/10 years] 40,000 Annual expenses on special equipment 30,000 Total 2,40,000 Machine-hours Fixed cost per hour 60 Set up rate per hour Operation rate per hour Fixed cost 260 260 Power 25 Wages 60 30 Comprehensive machine-hour rate 120 115 Statement of Machines B Costs to be absorbed on the Two Work Orders Particulars Work order 31 Work order 32 Hours Rate Amount Hours Rate Amount Set up time cost 10 3120 21,200 20 3120 32,400 Operation time cost 90 115 10,350 180 115 20,700 Total cost 11,550 23,100 P.10.12 A machine shop cost centre contains 6 machines of equivalent capacities. Three operators are employed on each machine: one at 350 per hour and two at 325 per hour each. The factory works a 40-hour week which includes 4 hours for setup time. The work is jointly done by the operators. The operators are paid fully for the 40 hours. In addition, they are paid a bonus of 10 per cent on produc- tive time. Costs are reported for this company on the basis of 13 four-week periods. The company for the purposes of computing machine-hour rate includes direct wages of the opera- tors and also recoups the factory overheads allocated to the machines. The following details of factory overheads applicable to the cost centre are available: 1. Setup time as described above. 2. Depreciation, 10 per cent per annum on original cost on each machine (original cost of each machine is 31,30,000) 3. Maintenance and repairs per week per machine is 32,500 4. Consumable stores per week per machine is 13,600 5. Power, 20 units per hour per machine at 35 per unit 6. Apportionment to the cost centre: Rent per annum 1,44,000 Heat and light per annum 5.40,000 Foreman's salary (2 in number) 7,20,000 Total expenses for 6 machines 14.04,000 From the above, you are required to compute: (a) The cost of running one machine for a 4-week period and (b) The machine-hour rate