Cost of Production Report (CPR) Questions and Answers

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 27, 2023

Question 1

The MST Manufacturing Company produces one product that passes through a single process in a manufacturing cycle lasting approximately 18 days.

Therefore, there will generally be some work-in-process inventories at the end of each month.

After MST started its manufacturing operations on 1 January, the costs of production for the rest of the month are given as follows:

Materials

$41,412

Labor

$32,054

Factory Overhead

$24,552

The production statistics for the month were:

Units completed and transferred to finished goods store

6,500

Units in process (materials 40% and labor and overhead 25%)

1,600

Required: Prepare a statement showing the equivalent production quantity for the month in terms of materials, labor, and factory overhead. Also, prepare a cost of production report.

Solution

MTS Manufacturing Company Cost of Production Report For the month of January 20xx

Cost of Production Report for MST Manufacturing Company

Working

Equivalent Production Quantity Formula

Question No. 2

The Tuttni Corporation manufactures one product that passes through two manufacturing departments. Production and manufacturing costs for the month of April were as follows:

Production and Manufacturing Costs at Tuttni Corporation

Required: Using the process costing system, prepare a cost of production report for the month.

Solution

Tuttni Corporation Cost of Production Report For the Month of April 20xx

Cost of Production Report for Tuttni Corporation
Cost Accounted for at Departments A and B

W.I.P ending inventory:

Application of Formula for Tuttni Corporation Cost of Production Report

Computation

Equivalent/Effective production

Department I

Materials = 9,400 + 600 x 50/100 = 9,700 units

Labor = 9,400 + 600 x 50/100 = 9,700 units

FOH = 9,400 + 600 x 50/100 = 9,700 units

Department II

Materials = 9,400 + 0 = 9,400 units

Labor = 9,400 + 0 = 9,400 units

FOH = 9,400 + 0 = 9,400 units

Cost of Production Report (CPR) Questions and Answers FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.