Problem 7 An industrial concern which had no costing system appointed a Cost Accountant. After installing a system of collection of cost data, the Cost Accountant observed that out of the three products which are produced independent of each other, loss is being incurred in product B. He immediately decides to advise management to discontinue manufacture of this product supported by the following tabulation: Product A $ Product B $ Product C $ Sales 4,90,000 1,00,000 65,000 Variable manufacturing cost 52,000 26,000 1,40,000 6,500 Fixed manufacturing overheads (apportioned) 19,000 1,05,000 Variable selling and distribution cost 18,000 18,000 17,000 4,000 Fixed selling and distribution costs 4,600 4,600 Total cost 81,000 66,600 2,67,000 Net profit 18,900 2,23,000 Net loss 1,600 Do you agree with the Cost Accountant's conclusion? Argue with your views on the basis of data