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Determine a comprehensive machine hour rate from the following: Original purchase price (subject to 10% p.a. depreciation on original cost) Rs. 324,000 Normal working hours
Determine a comprehensive machine hour rate from the following:
Original purchase price (subject to 10% p.a. depreciation on original cost) | Rs. 324,000 |
Normal working hours for the month | 200 hours |
(Machine works for only 75% of normal capacity) | |
Wages to labour (per day for 8 hours) | Rs. 125 per day |
Power cost for the month for time worked | Rs. 15,000 |
Electricity / lighting for the month | Rs. 7,500 |
Insurance of plant and building (apportioned) for the year | Rs. 16,250 |
Other general expenses per annum | Rs. 27,500 |
Explain 2 uses of determining the machine hour rate.
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