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It is necessary to know the four steps of producing a cost of production report, because the manager is accountable for the products and where they have been transferred out to or are still in the work in process department.

The financial end of year reports are for legislation, and the manager needs to at some point, say, hey I need to be able to account for the product at each stage of its development to the finished product stage.

Knowing each step of will ensure that each work in process shows where, how and what the product as done through each stage of its development

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