To calculate the machine hour rate for the month of December 2022, follow these steps:
1. Calculate the depreciable amount of the machine:
The depreciable amount is the difference between the cost of the machine and its scrap value.
[tex]\[
\text{Depreciable Amount} = \text{Cost of Machine} - \text{Scrap Value}
\][/tex]
Given:
- Cost of machine: ₹64,000
- Scrap value: ₹4,000
Therefore,
[tex]\[
\text{Depreciable Amount} = 64,000 - 4,000 = ₹60,000
\][/tex]
2. Calculate the total cost of the machine:
The total cost includes the depreciable amount plus the repair and maintenance costs over the life period of the machine.
[tex]\[
\text{Total Cost} = \text{Depreciable Amount} + \text{Repair and Maintenance}
\][/tex]
Given:
- Repair and maintenance cost: ₹5,000
Therefore,
[tex]\[
\text{Total Cost} = 60,000 + 5,000 = ₹65,000
\][/tex]
3. Calculate the machine hour rate:
The machine hour rate is calculated by dividing the total cost by the effective working hours of the machine.
[tex]\[
\text{Machine Hour Rate} = \frac{\text{Total Cost}}{\text{Effective Working Hours}}
\][/tex]
Given:
- Effective working hours: 10,000 hours
Therefore,
[tex]\[
\text{Machine Hour Rate} = \frac{65,000}{10,000} = ₹6.50 \text{ per hour}
\][/tex]
So, the machine hour rate for the month of December 2022 is ₹6.50.
