Priyank Ltd. produces two types of bags — ‘Premium' and 'Standard'. The summarized cost data for the year ended 31 st March, 2025 is given below:…

Cost Sheet of 'Premium' Particulars Per unit (₹) Total (₹) Direct materials (Working note- (i)) 8.00 4,80,000 Direct wages (Working note- (ii)) 4.00 2,40,000 Prime cost 12.00 7,20,000 Production overhead (Working note- (iii)) 1.20 72,000 Factory Cost 13.20 7,92,000 Administration Overhead (200% of direct wages) 8.00 4,80,000 Cost of production 21.20 12,72,000 Less: Closing stock (60,000 units – 54,000 units) - 1,27,200 Cost of goods sold i.e. 54,000 units 21.20 11,44,800 Selling cost 1.00 54,000 Cost of sales/ Total cost 22.20 11,98,800 Profit 7.80 4,21,200 Sales value (₹ 30 × 54,000 units) 30.00 16,20,000 Working Notes: (i) Direct material cost per unit of 'Standard' = M Direct material cost per unit of 'Premium' = 2 M Total Direct Material cost = 2 M × 60,000 units + M × 1,80,000 units Or,12,00,000 = 1,20,000 M + 1,80,000 M Or, M = 12,00,000 / 3,00,000 = 4 Therefore, Direct material Cost per unit of ‘Premium' = 2 × ₹ 4 = 8 (ii) Direct wages per unit for 'Premium' = W Direct wages per unit for 'Standard' = 0.6W So, (W x 60,000) + (0.6W x 1,80,000) = 6,72,000 W = 4 per unit (iii) Production overhead per unit = 2,88,000 / (60,000+1,80,000) = 1.20 Production overhead for 'Premium' = 1.20 × 60,000 units = 72,000 Notes: 1. Administration overhead is specific to the product as it is directly related to direct labour as mentioned in the question and hence to be considered in cost of production only. 2. Cash discount is treated as interest and finance charges; hence, it is ignored. 3. Penalty paid against the copyright infringement case is an abnormal cost; hence, not included.