A machine shop cost centre contains three machines of equal capacities. To operate these three machines nine operators are required i.e. three…

A machine shop cost centre contains three machines of equal capacities. To operate these three machines nine operators are required i.e. three operators on each machine. Operators are paid 20 per hour. The factory works for fourty eight hours in a week which includes 4 hours set up time. The work is jointly done by operators. The operators are paid fully for the forty eight hours. In additions they are paid a bonus of 10 per cent of productive time. Costs are reported for this company on the basis of thirteen four-weekly period. The company for the purpose of computing machine hour rate includes the direct wages of the operator and also recoups the factory overheads allocated to the machines. The following details of factory overheads applicable to the cost centre are available: Depreciation 10% per annum on original cost of the machine. Original cost of the each machine is 52,000.Maintenance and repairs per week per machine is 60.Consumable stores per week per machine are - 75.Power: 20 units per hour per machine at the rate of 80 paise per unit.Apportionment to the cost centre: Rent per annum - 5,400, Heat and Light per annum - 9,720, foreman's salary per annum - 12,960 and other miscellaneous expenditure per annum - 18,000.Required: (i) CALCULATE the cost of running one machine for a four week period. (ii) CALCULATE machine hour rate.