Production accounting includes investments in special forms of current assets of inventories of materials and raw materials, and in combination with labor and other factors of production, a finished product is created. The production process begins with the receipt of an order from the customer, after which a production plan is drawn up to find out what materials and raw materials are needed for the production process. When selling finished products, the entrepreneur draws up a shipping bill and an invoice. Accounting for production is a demanding job for manufacturing companies that must comply with regulations, standards and internal procedures. Inventories are recorded at cost, and later when used, records are made in accordance with one of the inventory calculation methods. The most commonly used method is the FIFO method. Because inventories are often the largest item of current assets and the largest are sometimes expenses among expenses of products sold, it is of great importance to properly manage inventories. From an accounting point of view, the framework for their recognition and measurement is IAS 2 and HSFI 10. The writing of this paper seeks to identify the specifics of production costs and the methods of cost calculation used in the wood-processing industry. This paper is based on the example of the company Požgaj d.o.o. shown is the accounting coverage of production costs, which includes the proper recording, accounting and recording of inventories of materials in the production of solid panels. The research was carried out with the help of the accounting data of the said company, which led to different calculations and presentation of the elements of production accounting in the selected company.