Problem:
X Ltd having 15 different types of automatic machines furnishes information as follows:
1. Overhead expenses:
i. Factory rent - Rs. 96,000 (Floor Area - 80,000 sq. ft)
ii. Heat and gas-Rs. 45,000
iii. Supervision - Rs. 1,20,000
1. Wages of the operator are Rs. 48 per day of 8 hours. He attends to one machine when it is under set-up and two machines while they are under operation.
In respect of machine B (one of the above machines), the following particulars are furnished:
1. Cost of the machine - Rs. 45,000; Life of the machine - 10 years; and scrap value at the end of its life - Rs. 5,000.
2. Annual expenses on special equipment attached to the machine are estimated at Rs. 3,000.
3. Estimated operation time of the machine is 3,600 hours while the set-up time is 400 hours per annum.
4. The machine occupies 5,000 sq ft. of the floor area.
5. Power cost is Rs. 2 per hour while the machine is in operation.
Find out the comprehensive machine hour rate of machine B. Also find out the costs to be absorbed in respect of the user of machine B, on the following two work orders:
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Work order 31
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Work order 32
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Machine set-up time (hrs)
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10
|
20
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Machine operation time (hrs)
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90
|
180
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