Ayala IncComputed an Overhead Rate for Machining Costs ($1,500,000) of $15

question 13

Short Answer

Ayala Inc.computed an overhead rate for machining costs ($1,500,000) of $15 per machine hour.Machining costs are driven by machine hours.If computed based on direct labor hours, the overhead rate for machining costs would be $30 per direct labor hour.The company produces two products, Hammer and Tong.Hammer requires 60,000 machine hours and 20,000 direct labor hours, while Tong requires 40,000 machine hours and 30,000 direct labor hours.Using activity-based costing, machining costs assigned to each product is

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Definitions:

Vertical Axis

The perpendicular line in a graph or chart representing the range of one of the variables under consideration.

Horizontal Axis

The x-axis in a graph, typically used to represent the independent variable or scale of measurement.

Widths

Widths refer to the measure of the extent of something from side to side; in data visualization, it could refer to the thickness of lines or bars.

Scale

An ordered series of marks at fixed intervals used in measurements or to represent the relationship of numbers.