A production machine was purchased six years ago for an installed price of 1735,000 SR. At...

 

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A production machine was purchased six years ago for an installed price of 1735,000 SR. At that time it was anticipated that the machine would last 8 years at a rate of 5500 hours per year. However, it is now in need of major repairs that will cost 425,000 SR. After the repair, the machine will last five years, operating 4500 hours per year. The applicable overhead rate is 37%. Determine the equipment cost rate (SR/hr) for this machine: a) before repair (original); b) after repair. A production machine was purchased six years ago for an installed price of 1735,000 SR. At that time it was anticipated that the machine would last 8 years at a rate of 5500 hours per year. However, it is now in need of major repairs that will cost 425,000 SR. After the repair, the machine will last five years, operating 4500 hours per year. The applicable overhead rate is 37%. Determine the equipment cost rate (SR/hr) for this machine: a) before repair (original); b) after repair.

Answer rating: 100% (QA)

To determine the equipment cost rate SRhr for the machine before and after the repair we need to cal... View the full answer