Production reports

Production reports give a summary of the total manufacturing cost of an item. These reports include charges to a processing department and the allocation of the total cost between the ending work-in-process inventory and the units completed and transferred out to the next department or finished goods inventory.

There are four sections under the cost of production report. They are the physical flow accounts, equivalent production, cost to accounts and costs accounted for. The Physical Flow section accounts for the physical flow of units in and out of a department. The Equivalent Production is the sum of all the units in process, restated in completed units and total units actually produced. This section involves the computation of equivalent units of production depends on the flow of cost method-weighted average or FIFO.

The third section involves the Costs to Account for and it accounts for incurring of costs that were in the process at the beginning of the period, transferred in from previous departments and added by the department during the current period. The last section i.e. the Costs Accounted for considers and accounts for the disposition of costs charged to the department that were transferred out to the next department or finished goods inventory, completed and on hand and the process at the end of the period. The total of the Costs to Account For section must be equal to the total of the Costs Accounted

The production report presents what is produced at each operation in the process of manufacturing. It reports the labor used, the number of parts produced, the parts per hour and all this compared to the standard pieces per hour amount. This production report provides a lot of insights to the management to look into the serious problems in case they appear. It also helps them to find out if the parts per type are low and finally make a report on the findings.

Questions

• What are production reports?
• What are the sections under a production report?