What is the machine-hour rate? Cost of machine ₹18,000; installation ₹2,000; scrap after 10 years ₹2,000; insurance ₹120 per annum; repairs ₹200 per annum; power 2 units per hour at ₹150 per 100 units; working hours 2,00
CS Executive · Cost and Management Accounting · PYQS · December 2014
What is the machine-hour rate? Cost of machine ₹18,000; installation ₹2,000; scrap after 10 years ₹2,000; insurance ₹120 per annum; repairs ₹200 per annum; power 2 units per hour at ₹150 per 100 units; working hours 2,000 per annum.
Answer & Explanation:
Correct Answer: Option (A)
Correct answer: (A) ₹4.06. The source states power at ₹150 per 100 units. Machine-hour cost = (20,000−2,000)/(10×2,000) + 120/2,000 + 200/2,000 + 2×150/100 = 4.06.
Topics: Overhead Costing
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