The financial books of a company reveal the following data for the year ended 31st March, 2026: ₹ Opening Stock: Finished goods 625 units 53,125…

(i) Profit as per financial records (For the year ended March 31, 2026) ₹ ₹ To Opening stock of Finished Goods 53,125 By Sales 22,80,000 To Work-in-process 46,000 By Closing stock of finished Goods 45,650 To Raw materials consumed 8,40,000 By Work-in-Process 41,200 To Direct labour 6,10,000 By Rent received 46,000 To Factory overheads 4,22,000 By Interest received 38,000 To Administration overheads 1,98,000 To Selling & distribution overheads 72,000 To Bad debts 18,000 To Dividend paid 1,22,000 To Profit 69,725 24,50,850 24,50,850 Profit as per costing records (For the year ended March 31, 2026) ₹ Sales revenue (12,615 units) 22,80,000 Cost of sales: Opening stock (625 units x ₹ 120) 75,000 Add: Cost of production of 12,405 units (Refer to working note 2) 21,84,960 Less: Closing stock (21,84,960×415 units / 12,405 units) 73,096 Cost of production of goods sold (12,615 units) 21,86,864 Add: Selling & distribution overheads (12,615 units x ₹ 2) 25,230 Cost of sales 22,12,094 Profit 67,906 (ii) Statement of Reconciliation (Reconciling the profit as per costing records with the profit as per financial records) ₹ ₹ Profit as per Cost Accounts 67,906 Add: Administration overheads over absorbed (₹3,64,160 – ₹ 1,98,000) 1,66,160 Opening stock overvalued (₹75,000 – ₹ 53,125) 21,875 Interest received 38,000 Rent received 46,000 3,39,941 Less: Factory overheads under recovered (₹ 3,66,000 – ₹ 4,22,000) 56,000 Selling & distribution overheads under recovery (₹ 72,000 – ₹ 25,230) 46,770 Closing stock overvalued (₹ 73,096 – ₹ 45,650) 27,446 Dividend 1,22,000 Bad debts 18,000 (2,70,216) Profit as per financial accounts 69,725 Working notes: 1. Number of units produced Units Sales 12,615 Add: Closing stock 415 Total 13,030 less: Opening stock 625 Number of units produced 12,405 2. Cost Sheet ₹ Raw materials consumed 8,40,000 Direct labour 6,10,000 Prime cost 14,50,000 Factory overheads (60% of direct wages) 3,66,000 Factory cost 18,16,000 Add: Opening work-in-process 46,000 Less: Closing work-in-process 41,200 Factory cost of goods produced 18,20,800 Administration overheads (20% of factory cost) 3,64,160 Cost of production of 12,405 units (Refer to working note 1) 21,84,960 3. Cost of production per unit: Total cost of Production / No. of units produced = ₹21,84,960 / 12,405 units = ₹176.14