Tesla, Inc. manufactures electric vehicles using process costing. In August 2025, the company incurs costs of $20 million and produces 10,000 vehicles. Due to defects, 500 units were classified as abnormal losses.

Required:

• Calculate the cost per unit produced by Tesla, Inc.
• Determine the equivalent units of production considering normal and abnormal losses.
• Allocate costs to completed units and units lost using the weighted average method.
• Analyze the impact of abnormal losses on unit costs and profitability.
• Discuss strategies to minimize abnormal losses in process costing.