diff --git a/erpnext/stock/doctype/packed_item/packed_item.py b/erpnext/stock/doctype/packed_item/packed_item.py
index 4d05d7a345c..d6067516660 100644
--- a/erpnext/stock/doctype/packed_item/packed_item.py
+++ b/erpnext/stock/doctype/packed_item/packed_item.py
@@ -48,7 +48,7 @@ def make_packing_list(doc):
 				update_packed_item_from_cancelled_doc(item_row, bundle_item, pi_row, doc)
 
 				if set_price_from_children:  # create/update bundle item wise price dict
-					update_product_bundle_rate(parent_items_price, pi_row)
+					update_product_bundle_rate(parent_items_price, pi_row, item_row)
 
 	if parent_items_price:
 		set_product_bundle_rate_amount(doc, parent_items_price)  # set price in bundle item
@@ -247,7 +247,7 @@ def get_cancelled_doc_packed_item_details(old_packed_items):
 	return prev_doc_packed_items_map
 
 
-def update_product_bundle_rate(parent_items_price, pi_row):
+def update_product_bundle_rate(parent_items_price, pi_row, item_row):
 	"""
 	Update the price dict of Product Bundles based on the rates of the Items in the bundle.
 
@@ -259,7 +259,7 @@ def update_product_bundle_rate(parent_items_price, pi_row):
 	if not rate:
 		parent_items_price[key] = 0.0
 
-	parent_items_price[key] += flt(pi_row.rate)
+	parent_items_price[key] += flt((pi_row.rate * pi_row.qty) / item_row.stock_qty)
 
 
 def set_product_bundle_rate_amount(doc, parent_items_price):
diff --git a/erpnext/stock/doctype/packed_item/test_packed_item.py b/erpnext/stock/doctype/packed_item/test_packed_item.py
index ad7fd9a6976..ad06732bc3e 100644
--- a/erpnext/stock/doctype/packed_item/test_packed_item.py
+++ b/erpnext/stock/doctype/packed_item/test_packed_item.py
@@ -126,8 +126,8 @@ class TestPackedItem(FrappeTestCase):
 		so.packed_items[1].rate = 200
 		so.save()
 
-		self.assertEqual(so.items[0].rate, 350)
-		self.assertEqual(so.items[0].amount, 700)
+		self.assertEqual(so.items[0].rate, 700)
+		self.assertEqual(so.items[0].amount, 1400)
 
 	def test_newly_mapped_doc_packed_items(self):
 		"Test impact on packed items in newly mapped DN from SO."