A D.C. City Council member called for a full report yesterday on the spending and manpower used to produce City News, the new monthly tabloid launched last month under auspices of Mayor Walter E. Washington.

Arrington Dixon (D-Ward 4), chairman of the council's government operations committee, said at a hearing that he was curious how an office that described itself last year as understaffed and overworked could take on the added task of writing and editing the tabloid.

The first two issues of City News contained several articles reporting favorably on activities of the mayor, who is expected to seek reelection.

Sam Eastman, director of the D.C. office of Public Affairs which produces City News, replied that his staff doing the job, with "some weekend work and some late-night hours."

Eastman said it costs about $2,000 to print the 90,000 copies of the paper each month.

Dixon, a supporter of Council Chairman Sterling Tucker for mayor and a probable candidate to succeed Tucker as council chairman, stopped short of imputing political motives to the mapor in starting the paper. "I'll leave that to the readers," he told a reporter.

Dixon reminded Eastman that, during consideration of the city budget for fiscal year 1979, the council voted to eliminate the Office of Public Affairs and to transfer half its staff of eight to the mayor's office.

It was at that time, Dixon said, that Eastman said the office was overworked and understaffed. After the mayor vetoed the cut for Eastmen's office, the funding was restored to the budget, which is now pending before Congress.

In a related development, council member Polly Shackleton (D-Ward 3) asked Lorenzo Jacobs, director of the Department of Housing and Community Development, for a report on the cost and distribution figures of a new silver-bound booklet entitled, "New Dynamism in the Nation's Capital."

City officials said the booklet, which contains a preface signed by the mayor, is intended for distribution to business firms that express interest in coming to Washington.