Cost of production report (CPR) questions and answers

Question No. 1

The MST Manufacturing Company produces a single product that goes through one process only. The manufacturing cycle usually takes 18 days. This means that there will generally be some work in process inventories at the end of each month.

The company started its manufacturing operations on 1st January and the cost of production for this month were 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 the statement showing the equivalent production quantity for the month in terms of materials, labor and factory overhead. Also, prepare cost of production report.


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

Cost of Production Report Questions and Answers


Formula: Units completed & transferred out + Units in process only completed portion.

Cost of Production Report Example

Question No. 2

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

Cost of Production Report Practical Problem


Using Process Costing system, prepare a cost of production report for the month.


The Tuttni Corporation
Cost of Production Report
For the Month of April 20…

Example 2.1

W.I.P ending inventory:



Equivalent/Effective Production

Department I

Material = 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

Material = 9,400 + 0 = 9,400 units

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

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

Question No. 3 (Normal Loss at the Beginning)

A manufacturing company makes a single product in three producing departments. Cost and production date for April 2019, are:


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