The Parson Valve Corporation Was Recently Formed to Produce a Brass

question 121

Essay

The Parson Valve Corporation was recently formed to produce a brass valve that forms an essential part of a compressor manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. September is Parson's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled $1,400,000, while conversion costs equaled $1,800,000. Accounting records indicate that 800,000 valves were started in September and 700,000 valves were completed.
Ending inventory was 20% complete as to conversion costs.
Required:
a. What is the total manufacturing cost per valve for September?
b. Allocate the total costs between the completed valves and the valves in ending inventory.

---

Definitions:

Stimulus Generalization

The psychological phenomenon where a response learned for one stimulus is involuntarily elicited by similar stimuli.

Higher-Order Conditioning

A form of learning in which a stimulus is paired with a previously conditioned stimulus, creating the same conditioned response without directly being paired with the unconditioned stimulus.

Response Renewal

The reemergence of a previously extinguished response following a change in context.

Extinction

In psychology, the process by which a conditioned response diminishes and disappears following repeated exposure without reinforcement.