Computech Company had 24 units in process, 50% converted, at the beginning of a recent, typical month; the conversion cost component of this beginning inventory was $740. There were 20 units in process, 50% converted, at the end of the month. During the month, 4,500 units were completed and transferred to finished goods, and conversion costs of $300,000 were incurred. No units were lost.
Required:
(1) Carrying calculations to three decimal places, find the conversion cost per unit for the month by each of the following methods:
(a) The average cost method as used in process costing.
(b) Divide the total conversion cost incurred during the month by the number of units completed during the month (do not calculate equivalent units).
(c) Divide the total conversion cost incurred during the month by the number of units started during the month.
(2) Using the three unit costs calculated in requirement 1, calculate three amounts for the total conversion cost of the ending inventory of work in process, to the nearest dollar.
(3) In light of the results of requirement 2, which of the three methods of calculating unit conversion cost would you recommend for the purpose of inventory costing, la, lb, or lc?
(4) What one attribute of Computech Company's production system is the most important in explaining the results of requirements 1, 2, and 3?