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

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