that period in order to calculate an hourly rate for fixed charges. For machine expenses, an hourly rate is calculated for each item of expenses separately by dividing the expenses by the normal working hours. 5) Total of standing charges and machines expenses rates will give the ordinary machine hour rate. Some of the bases which may be adopted for apportioning the different expenses for the purpose of calculation of machine hour rate are given below. Some of the expenses and the basis of apportionment are given below. 1. Rent and Rates - Floor area occupied by each machine including the surrounding space. 2. Heating and Lighting - The number of points used plus cost of special lighting or heating for any individual machine, alternatively according to floor area occupied by each machine. 3. Supervision - estimated time devoted by the supervisory staff to each machine. 4. Lubricating Oil and Consumable Stores - On the basis of past experience. 5. Insurance - Insurable value of each machine 6. Miscellaneous Expenses - Equitable basis depending upon facts. S47 Machine Expeuses 1. Depreciation - cost of machine including cost of stand-by equipment such as spare motors, switchgears etc., less residual value spread over its working life. 2. Power - Actual consumption as shown by meter readings or estimated consumption ascertained from past experience. 3. Repairs - Cost of repairs spread over its working life. A machine is purchased for cash at Rs.9.200. Its working life is estimated to be 18,000 hours after which its scrap value is estimated at Rs.200. it is assumed from past experience that: 1) The machine will work for 1,800 hours annually. (i) The repair charges will be Rs.1,800 during the whole period of life of the machine. (iii) The power consumption will be 5 units per hour at 6 paisa per unit. (iv) Other annual standing charges are estimated to be Rs. (a) Rent of department (machine occupies 1/5 of total space) 780 (b) Light (12 points in the department-2 points engaged in the machine) 288 (e) Foreman's salary (1/4" of his time is occupied in the machine) 6000 (d) Insurance premium (fire) for machinery 36 (e) Cotton waste Find out the machine hour rate on the basis of above data for allocation of the works expenses to all jobs for which the machine is used. 60