A machine shop cost centre contains six machines of equivalent capacities. Three operators are employed on eac machine, one at Rs 10 an hour and two Rs 5 per hour each. The factory works a forty hour a week which includes fou hours for set up time. The work is jointly done by the operators. The operators are paid fully for the forty hours. I addition, they are paid a bonus of 10% on productive time. Costs are reported for this company on the basis of thirtee four-weekly periods The company for the purpose of computing machine hour rate includes the direct wages of the operators and als recoups the factory overheads allocated to the machines. The following details of the factory overheads applicable t the cost centre are available. 

1. Set up time as described above. 

2. Depreciation 10% on original cost on each machine Original cost of each machine is Rs 13000. 

3. Maintenance and repairs per week per machine is Rs 25. 

4. Consumable stores per week per machine is Rs 36. 

5. Power: 20 units per hour per machine at 40 paisa per unit. 

6. Apportionment to cost centre: Rent per annum Rs 3000 Heat and light per annum Rs 5400 Foreman's salary per annum Rs 7200 

Required: 

(A) Compute the cost of running one machine for a four week period 

(B) The machine hour rate.

Answer rating: 100% (QA)

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