From the undernoted data calculate the machine hour rate of a milling machine Cost of machine - Rs. 30500 ,Scrap value - Rs. 2500 ,Estimated life of the machine - 12 years, Working days per year- 200 days of 8 hours & 100 days of 6 hours ,Maintenance and repairs- 75% of the cost of machine, Stores issued- Rs.1000 ,Power consumption- RS.2 per operation hour, Insurance premium- 1% of cost of machine, Expenses per year- Rs.7500 ,Idle time estimated -10%
Answers
Explanation:
To calculate the machine hour rate for the milling machine, you will need to first determine the total number of hours that the machine will be used in a year. Based on the information provided, the machine will be used for 200 days of 8 hours per day, and 100 days of 6 hours per day, for a total of (200 * 8) + (100 * 6) = 2000 hours per year.
Next, you will need to determine the total annual cost of operating the machine. This includes the cost of maintenance and repairs, stores issued, power consumption, insurance premium, and any other expenses. Based on the information provided, the total annual cost will be (0.75 * 30500) + 1000 + (2 * 2000) + (0.01 * 30500) + 7500 = 38250 rupees.
Finally, you will need to subtract the scrap value and the cost of the machine from the total annual cost to get the total annual cost of operating the machine, and then divide this number by the total number of hours the machine will be used in a year to get the machine hour rate. This works out to be ((38250 - 2500 - 30500) / 2000) = 7.125 rupees per hour.
It's worth noting that this calculation does not take into account idle time, or the time when the machine is not being used for production. If the machine has an estimated idle time of 10%, you will need to adjust the total number of hours the machine is used in a year accordingly to get a more accurate machine hour rate.