The cost per unit of the three products X, Y and Z are given as follows:

Particulars

X (Rs.)

Y (Rs.)

Z (Rs.)

Direct Material

20

16

18

Direct Labour

12

14

12

Variable Overheads

8

10

6

Fixed Expenses

6

6

4

46

46

40

Profit

18

14

12

Selling Price

64

60

52

No. of units Produced

10,000

5,000

8,000

Production arrangements are such that if one product is given up, the production of the others can be raised by 50%. The directors propose that Product Z should be given up because the contribution from the product is the lowest.

Present a suitable analysis of the data indicating whether the proposal should be accepted or not.