The bending moment $M$ acts about the $z$ axis; therefore, the neutral axis for this configuration will be the $z$ axis.

The base dimension $b$ is parallel to the neutral axis, and the height dimension $h$ is perpendicular to the neutral axis. The moment of inertia $I_z$ needed here is thus:

To calculate the transverse shear stress and the normal stress due to the moment, the moment of inertia will be computed from the familiar formula:

$I_z=\frac{b{h}^3}{12}$