Q.A consigned 500 radio sets, costing ₹100 each, to B. A paid ₹5,000 as freight and insurance while despatching the goods. B paid ₹2,000 as clearing charges on taking delivery of the whole consignment, and later sold 400 sets. Find the value of the unsold stock of 100 radio sets remaining with B.

The unsold sets must carry their proportionate share of both A's freight/insurance and B's clearing charges, since both are non-recurring expenses incurred before the goods became saleable.

Cost of 500 sets = 500 × 100 = 50,000; total non-recurring expenses = 5,000 + 2,000 = 7,000; total = 57,000; cost per set = 57,000 ÷ 500 = 114; value of 100 unsold sets = 100 × 114 = 11,400.

Cost of goods sent = 500 sets × ₹100 = ₹50,000.

Non-recurring (direct) expenses to be included in the valuation: A's freight and insurance ₹5,000, plus B's clearing charges ₹2,000 (clearing charges are paid to take delivery of the goods and get them into a saleable state, so they qualify exactly like freight does) = ₹7,000.

Total cost for valuation purposes = 50,000 + 7,000 = ₹57,000.

Cost per radio set = 57,000 ÷ 500 = ₹114.

Value of the 100 unsold radio sets = 100 × 114 = ₹11,400.

Check: value of the 400 sets sold, at the same rate, = 400 × 114 = 45,600; adding the unsold stock value (45,600 + 11,400 = 57,000) exactly reproduces the total cost and expenses of 57,000 — confirming no cost has been lost or double-counted.

A common error is valuing the unsold stock at the plain cost of ₹100 per set, ignoring that both A's and B's non-recurring expenses genuinely form part of getting every set into a saleable condition and must be spread over ALL 500 sets, sold and unsold alike.