Amazon uses a process costing system. The following information is provided for the month of May:

• Beginning Work in Process (WIP): 10,000 units, 60% complete for materials, 40% complete for conversion costs
• Units started into production: 50,000 units
• Ending WIP: 8,000 units, 80% complete for materials, 70% complete for conversion costs
• Costs: Beginning WIP: $20,000 (materials), $15,000 (conversion); Added during May: $200,000 (materials), $150,000 (conversion)

Requirements:

1. Compute the equivalent units for materials and conversion costs.
2. Calculate the cost per equivalent unit for materials and conversion costs.
3. Determine the total cost of units transferred out and the cost of ending WIP.
4. Prepare a cost reconciliation report.

Analyze the impact of production efficiency on the cost per unit.