In the present paper we study single server machining system having operating as well as mixed standby units. The service station is subject to breakdown while in operation. The life times and repair times of the failed units and service station are assumed to be exponentially distributed. The set up time for the repairing of service station is also exponentially distributed. In case when all standby units are exhausted, the system may also operate in degraded mode with less than M operating units, which are required for normal functioning of the system. We employ recursive method to obtain the steady state probability distribution of the number of failed units in the system. The performance indices such as expected number of failed units in the system, average waiting time, throughput, etc. are obtained in closed form in terms of probabilities.