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Process Cost Report
This is a commonly employed statement that traces the flow of units produced and costs incurred in the production process. The report is prepared for every process and it provides a reconciliation of the physical flow of units and the net costs for the period or duration. Assuming no losses or spoilage, the specified relationships will always hold as:
1. Physical Units:
Beginning W.I.P + Units started during - Units to account for the period.
= Units completed and transferred + ending work in progress - Units accounted for.
2. Costs:
Cost of Beginning W.I.P. + Current costs incurred - Costs to account for = Costs of units completed and transferred.
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