The cost per unit of three products A, B and C are given as follows:

Production arrangements are such that if one product is given up, the production of others can be raised by 50%.
The directors propose that product C should be given up because the contribution from the product is the lowest.
Present suitable analysis of the data indicating whether the proposal should be accepted.

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A B Products Rs. Rs. Rs. Direct materials 40 32 36 Direct labour 24 28 24 Variable overheads 16 20 12 Fixed expenses 12 12 8 92 92 80 Profit 36 28 24 Selling price 128 120 104 Number of units 5,000 2,500 4,000 produced