: Four steps to prepare a production cost report MIXING DEPARTMENT Units Work in process, June 1 Direct materials: 100% complete Conversion costs: 70% complete Units started into production during June Units completed and transferred out to Baking Department Work in process, June 30 Direct materials: 100% complete Conversion costs: 60% complete Costs Work in process, June 1 Direct materials: 100% complete Conversion costs: 70% complete Cost of work in process, June 1 Costs incurred during production in June Direct materials Conversion costs Costs incurred in June Step 1: Compute physical unit flow 100,000 800,000 700,000 200,000 $ 50,000 35,000 $ 85,000 $400,000 170,000 $570,000 Step 2: Compute equivalent units of production Step 3: Compute unit production costs Step 4: Prepare a cost reconciliation schedule and the Production Cost Report