Question $2(20$ marks$)$

XYZ is a manufacturing firm that produces toys utilizing a process costing system. The company operates two work$-$in$-$process departments: Setup and Testing. Each toy first undergoes the Setup process before moving to the Testing procedure, after which it progresses to the finishing stage. Conversion costs are added evenly during testing operations. Direct material is added at the end of the testing procedure. Below is the quantity and pricing information for the Testing department for the month of December.

$\backslash$table$[[$Beginning work in process units,$3500],[$Transferred$-$in units during month,$2000],[$Units completed,$4000],[$Ending work in process units,$1500],[$Beginning work$-$in$-$process direct materials costs,$$0$