Valor Company Is Planning to Implement an Activity-Based Costing"ABC"system to Apply

question 46

Short Answer

Valor company is planning to implement an activity-based costing"ABC"system to apply overhead costs to products.Three activities were identified and rates were calculated for each activity.
$\begin{array}{ll}\text { Purchase requisitions: } & \$ 5 \text { per requisition processed } \\\text { Production setup: } & \$ 20 \text { per setup } \\\text { Quality control: } & \$ 30 \text { per inspection }\end{array}$
Assume 600 purchase requisitions were processed,1,200 production setups were performed,and 300 products were inspected for the year.Which of the following journal entries would be made by Valor to record the application of overhead?
a.
$\begin{array}{llr} \text { Work in Process Inventory } &36,000\\ \text { Manufacturing Overhead} &&36,000\\\end{array}$

b.
$\begin{array}{llr} \text { Manufacturing Overhead }&36,000\\ \text { Work in Process Inventory } &&36,000\\\end{array}$

c.
$\begin{array}{llr} \text { Manufacturing Overhead } &36,000\\ \text { Finished Goods Inventory } &&36,000\\\end{array}$

d.
$\begin{array}{llr} \text { Finished Goods Inventory } &36,000\\ \text { Work in Process Inventory} &&36,000\\\end{array}$

e. $\text {None of the answer choices is correct.}$

---

Definitions:

Chromosomes

Structures within cells that contain DNA and carry genetic information essential for the development, function, and reproduction of living organisms.

Pituitary Gland

A small, pea-sized gland located at the base of the brain, crucial for controlling growth, metabolism, and the function of other endocrine glands.

Glial Cells

Non-neuronal cells in the nervous system that support, protect, and nourish neurons, playing crucial roles in maintaining homeostasis.

Pyramidal Cells

A type of neuron found in areas of the brain such as the cerebral cortex, known for their pyramid-shaped cell bodies and involvement in many cognitive processes.