Q.The Cost of Production of a manufacturing unit for a period was ₹1,98,000. Office & Administration Overhead was ₹18,000 and Factory Overhead was ₹30,000. Direct Material Consumed was ₹90,000 and Direct Expenses were ₹10,000. Find the amount of Direct Wages for the period.

This is the reverse of the usual Cost Sheet direction — working backward from Cost of Production down to Prime Cost, and then isolating the one missing element within Prime Cost.

Factory Cost = Cost of Production − Office & Admin Overhead = 1,98,000 − 18,000 = ₹1,80,000 …

Since the question gives a downstream total (Cost of Production) and asks for an upstream component (Direct Wages, which is part of Prime Cost), the Cost Sheet must be worked BACKWARD, one stage at a time, by subtracting each overhead in reverse order of how it was originally added.

Step 1 — Factory Cost from Cost of Production:

Cost of Production = Factory Cost + Office & Administration Overhead

⇒ Factory Cost = Cost of Production − Office & Administration Overhead = ₹1,98,000 − ₹18,000 = ₹1,80,000

Step 2 — Prime Cost from Factory Cost:

Factory Cost = Prime Cost + Factory Overhead

⇒ Prime Cost = Factory Cost − Factory Overhead = ₹1,80,000 − ₹30,000 = ₹1,50,000

Step 3 — Direct Wages from Prime Cost:

Prime Cost = Direct Material Consumed + Direct Wages + Direct Expenses

⇒ Direct Wages = Prime Cost − Direct Material Consumed − Direct Expenses = ₹1,50,000 − ₹90,000 − ₹10,000 = ₹50,000 …

The same answer can be reached in one combined step rather than three separate ones: Direct Wages = Cost of Production − Office & Admin Overhead − Factory Overhead − Direct Materi …

When working backward through a Cost Sheet, a common error is subtracting the overheads in the wrong order (e.g. subtracting Factory Overhead before Office & Administration Overhead) — since Office & Administration Overhead was the LAST amount added when moving forward, it must be the FIRST …