A machine that cost £35,000 is operated 8 hours a day in a 5-day week but one hour each day is used for test purposes. For use of the machine there are three scales of charges, the first at the rate of £5 an hour for private use, the second at £15 an hour for research work and the third at £40 an hour for commercial work. It is estimated that the number of hours charged at the first, second and third rates are in ratios 4:2:1. What percentage of total receipts do receipts from commercial work represent?
The machine is operated for 8 hours a day less 1 hour for testing, or:
8 - 1 =7 hours per day
7 x 5 =35 hours per week.
The ratio is: 4:2:1 =7
4/7 x 35 x 5 =100 pounds - revenue from private use
2/7 x 35 x 15=150 pounds - revenue from research work
1/7 x 35 x 40 =200 pounds - revenue from commercial use
100 + 150 + 200 =450 pounds - total revenue per week
200 / 450 =.4444 x 100 =44.44% of revenues are from commercial use.