What is a Process Cost Summary?

Definition: A process cost summary is a production report that shows a department’s expenses, units produced, and costs allocated to the production units. In other words, this is a report that summaries all of the production activities of a department or process.

What Does Process Cost Summary Mean?

Managers use these reports to monitor their departments’ performance and control the expense levels during the production process. The process cost summary sheet is extremely helpful for higher-level management because it gives shows the performance of each department manager. In this way, the same report can be used by both department managers to evaluate production performance and higher-level managers to evaluate the department managers themselves.

At the end of the year, the production report can also be used to help accountants prepare the financial statements. For example, materials costs and work in process costs are both reported on the summary. These totals show up on the balance sheet and the cost section of the income statement.


A general process cost summary report has three main sections: costs charged to production, costs per equivalent unit of production, and cost assignment and reconciliation.

The first section calculates the total departmental or process costs incurred during the period by adding the beginning and current direct materialsdirect labor, and factory overhead.

The second section calculates the total cost per equivalent unit produced. In order to do this, we must first calculate the total number of units in production including the fully and partially completed units. Next this total number of units is converted into equivalent units. Then the total unit costs are applied to the EUP.

The third section is simply a reconciliation of the first two. The EUP costs are added by totaling the cost of goods manufactured with the ending goods in process to arrive at the total costs accounting for. This total should equal the total costs calculated in section one.