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Computation of Machine Hour Rate

The document provides information to calculate the machine hour rate for two machines. For the first machine, the machine hour rate is calculated to be Rs. 1.82 based on its cost, scrap value, repairs, power usage, and hours worked over a 4 week period. For the second machine, the machine hour rate is calculated to be Rs. 6.75 per hour based on its cost, freight, installation, working life, repairs, power usage, lubricating oil, consumable stores, wages, and hours worked per day. Standing charges are Rs. 4.75 per day and total machine expenses work out to Rs. 6.75 per hour.

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Tamilselvi A
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11K views4 pages

Computation of Machine Hour Rate

The document provides information to calculate the machine hour rate for two machines. For the first machine, the machine hour rate is calculated to be Rs. 1.82 based on its cost, scrap value, repairs, power usage, and hours worked over a 4 week period. For the second machine, the machine hour rate is calculated to be Rs. 6.75 per hour based on its cost, freight, installation, working life, repairs, power usage, lubricating oil, consumable stores, wages, and hours worked per day. Standing charges are Rs. 4.75 per day and total machine expenses work out to Rs. 6.75 per hour.

Uploaded by

Tamilselvi A
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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COMPUTATION OF MACHINE HOUR RATE

From the following particulars compute the machine hour rate


Cost of the machine Rs. 11000
Scrap value Rs. 680
Repairs for the effective working life Rs. 1500
Standing charges for 4 weekly period Rs. 40
Effective working life 10000 hours
Power used: 6 units per hour at 5 paise per unit
Hours worked in 4 weekly periods: 120 hours.
Computation of machine hour rate:
Per hour
Particulars
Rs. P.
Standing charges [40/120] 0.3333
Machine expenses:
Depreciation = cost−scrap = 11000−680 1.0320
life time 10000

Repairs = 10000
1500
0.1500 1.482
Power [6 x 0.05] 0.3000
Machine Hour Rate 1.8153
or 1.82
Work out the machine hour rate for the following machine whose
scrap value is ‘nil’.
i. Cost of machine Rs. 360000
ii. Freight and installation Rs. 40000
iii. Working life : 20 years
iv. Working hours : 8000 per year
v. Repair charges : 50% of depreciation
vi. Power: 10 units per hour @ 10 paise per unit
vii. Lubricating oil @ Rs.2 per day of 8 hours
viii. Consumable stores @ Rs. 10 per days of 8 hours
ix. Wages of operator @ Rs. 4 per day
Computation of machine hour rate: [per day - 8 hours]
Particulars Per day Per hour
Rs. Rs. P.
Standing charges: 2.00
Lubricating oil 10.00 2.00
Consumable stores 4.00
Wages of operators
16.00
Standing charges per day 4.75
Machine expenses: 2.50
Depreciation = life∈hours = 8000 x 20
cost +freight −scrap 360000+40000−0

1.25
Repairs charges 50% of depreciation = [2.50 x 50%]
Power 10 units at Rs.0.10 each [10 x 0.10] 1.00
Total machine expenses
Machine Hour Rate 6.75

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