A company manufactures three products. The respective details are: The management proposes to discontinue line A as for the last few years it has been showing losses. Future prospects of the other two...

A company manufactures three products. The respective details are:

The management proposes to discontinue line A as for the last few years it has been showing losses. Future prospects of the other two lines being good, it is intended to utilise the disengaged capacity in line A, in line B and, C equally. Expected per cent rise in prices and costs are:

Fixed overheads shall remain the same. You are required to prepare a statement of projected profitability and advise the management as to whether the scheme may be adopted.