A machine was purchased on 1st January, 2007 for Rs. 5 lakhs. The total cost of all machinery inclusive of the new machine was Rs. 75 lakhs. The following further particulars were available.
Expected life of the machine – 10 years
Scrap value at the end of the life – Rs. 5,000
Repairs and maintenance for the machine during the year Rs. 2,000
Expected number of working hours of the machine per year 4,000
Insurance premium annually for all machines Rs. 4,00
Power consumption for the machine per hour @ Rs. 5 @ per unit = 25 units
Area occupied by the machine – 100 sq feet
Area occupied by other machines – 1,500 sq. feet
Rent per month of the department Rs. 800
Lighting charges for 20 points for the whole department out of which three points are for the new
machine – Rs.120 per month
Compute the machine hour rate for the machine.