Cost of production of a product manufactured by ABC Ltd. worked out to ₹350 per piece. Out of the total produced pieces, company sold 120 pieces @ ₹700 per piece to industrial consumers, 70 pieces to a Central Government

Cost of production of a product manufactured by ABC Ltd. worked out to ₹350 per piece. Out of the total produced pieces, company sold 120 pieces @ ₹700 per piece to industrial consumers, 70 pieces to a Central Government department @ ₹690 per piece, 210 pieces to wholesaler @ ₹720 per piece and 70 pieces in retail @ ₹800 per piece. 20 pieces were distributed as free samples. Out of the 70 pieces sold to Government department, 20 pieces were rejected by them, which were subsequently sold to other customers @ ₹300 per piece, without bringing them back into the factory. Balance pieces were in stock, out of which 25 pieces got damaged and have become unsaleable. All the above prices are exclusive of excise duty and VAT. The rate of excise duty on the product is 12% plus education cess @ 3%. (ii) Advice the management about the steps to be taken in respect of 25 pieces which were damaged in storage and became unsaleable.