ECONOMICS

Detailed explanation-1: -A production cost report identifies the total cost (direct materials, labor, and overhead), of producing a product. A production cost report helps managers answer several important questions: How much does it cost to produce each unit of product for each department?

Detailed explanation-2: -Manufacturing costs are the costs incurred during the production of a product. These costs include the costs of direct material, direct labor, and manufacturing overhead. The costs are typically presented in the income statement as separate line items. An entity incurs these costs during the production process.

Detailed explanation-3: -The cost report that is prepared for each department is termed a cost of production report. The cost of production report provides comprehensive information on the material, labor, and overhead incurred within each department during a period.

Detailed explanation-4: -The primary difference between the two costing methods is that a process costing system assigns product costs-direct materials, direct labor, and manufacturing overhead-to each production department (or process) rather than to each job.