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

question 20

Multiple Choice

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 Hammer Tong

• A)$600,000 $900,000
• B)$750,000 $750,000
• C)$800,000 $700,000
• D)$900,000 $600,000

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Definitions:

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