Works overhead is Rs 40,000, total machine hours is 8500 hours and time allowed for machine setting is 500 houRs What is the machine rate?

The correct answer is: A. Rs. 2 per hour.

The machine rate is calculated by dividing the works overhead by the total machine hours. In this case, the works overhead is Rs 40,000 and the total machine hours is 8500 hours. Therefore, the machine rate is Rs 40,000 / 8500 hours = Rs 2 per hour.

Option B is incorrect because it is the machine rate per hour of machine setting, not per hour of machine operation. Option C is incorrect because it is the machine rate per hour of machine operation plus the machine setting time. Option D is incorrect because it is the machine rate per hour of machine operation plus the machine setting time plus the works overhead.