Definition and explanation

The cost of manufacturing report (CPR) is a document used in procedure costing system that summarizes the information around the flow of units and costs v the work-related in procedure account that a processing department. It is same to the job expense sheet ready in a project order costing system. A separate price of production report is ready for each processing department.

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The price of manufacturing report is considered a vital management record because it provides managers with the following an essential information about production and also cost that a handling department:

The number of units moved in and transferred the end by a department throughout the month.The greatest production cost among materials, labor and also manufacturing overhead.The influence of a recent improvement in production process on per unit cost in a processing department.A far-ranging change in every unit cost due come unexpected readjust in one or more cost elements like straight materials, straight labor and manufacturing overhead.The hurdles or limiting factors existing in one or more processing departments that might potentially harass the overall output efficiency of the firm.

Other names offered for cost of manufacturing report are production price report and also production report.

Sections or parts of a price of manufacturing report

A cost of manufacturing report consists of the complying with three sections/parts:

Quantity schedule sectionCost per tantamount unit sectionCost reconciliation section

Let’s briefly describe the objective of every section.

1. Quantity schedule section

Quantity schedule is the first section that a expense of production report. This ar summarizes the circulation of physics units with the relevant processing department and also shows the identical units because that materials and conversion costs. The percent of completion of any type of units in work in process beginning and ending inventory is also shown in this section. The quantity schedule likewise guides in prepare the other two part of the price of production report.

2. Expense per tantamount unit section

In this section, the price per equivalent unit is computed. Under weighted mean method, that is done by separating the full of beginning inventory cost and cost added during the duration by the identical units of production computed under weighted median method. Click right here to read exactly how equivalent systems of manufacturing are computed making use of weighted typical method.

3. Expense reconciliation section

In this section, the expense charged come the department is reconciled or accounting for. Usually, the complete cost charged to a department is composed of the following:

Cost of start work in procedure inventoryMaterials, job overhead prices incurred by the department during present periodCost transferred in from coming before department throughout the period

The full of over costs is accounted for by computer the adhering to amounts:

Cost the units moved to the next department or finished goods storeroom.Cost in finishing work in procedure inventory.


The Jessica company produces a product offered to clean mirrors and also head lights of vehicles. The company uses a procedure costing and also has two handling departments – room X and department Y. The processing starts in room X wherein three various chemicals are blended together in equal proportions. After mixing in room X, the partially completed units space transferred to room Y. The complying with data has actually been taken from department X.

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Required: Using above data, all set a price of manufacturing report of room X because that the month that January.