In one of the factory department of Toyota company a machine costs Rs. 11500. It is expected that it will work for about 20000 hours and its scrap value is estimated at Rs. 1500. The rent for the department is Rs. 400 per month and 25% of the area of the department is utilized for conducting the operation of the machine.
One foreman and an operator are employed on a salary of Rs. 800 and Rs. 400 per month respectively to work on one more machine of a similar type.
The other expenses for the month in the department are as follows:
Light charges for the department Rs. 80, having 16 light points in all out of which only four points is used at this machine. Total power consumed for two machines of equal H.P. is Rs. 320. Indirect labor for the machine is Rs. 50 and repairs Rs. 40. In such a case, what is the machine hour rate for the month when it is expected to work for 40 hours a week?
Answers
Answer:
From the details furnished below you are required to compute a comprehensive machine-hour rate :
Original purchase price of the machine
3,24,000
(subject to depreciation at 10% per annum on original cost)
Normal working hours for the month
200 hours
(The machine works to only 75% of capacity)
Wages of Machine man
*125 per day (of 8 hours)
Wages for Helper (machine attendant)
*75 per day (of 8 hours)
Power cost for the month for the time worked
15,000
Supervision charges apportioned for the machine centre for the month 3,000
Electricity & Lighting for the month
* 7,500
Repairs & maintenance (machine) including
Consumable stores per month
17,500
Insurance of Plant & Building (apportioned) for the year
16,250
Other general expense per annum
27,500
The workers are paid a fixed Dearness allowance of 1,575 per month. Production bonus payable to
workers in terms of an award is equal to 33.33% of basic wages and dearness allowance. Add 10% of
the basic wage and dearness allowance against leave wages and holidays with pay to arrive at a com-
prehensive labour-wage for debit to production.
