(Profitability of a product). The Novelties Ltd. is not keen on making special efforts to push the sales of product B, one of three main products it deals in, since the product B is not considered to...

Extracted text: (Profitability of a product). The Novelties Ltd. is not keen on making special efforts to push the sales of product B, one of three main products it deals in, since the product B is not considered to be as profitable as the other two. The selling prices and cost of the three products are : Product Selling Direct Direct Labour Price Material Dept. X $ Dept. Y $ Dept. Z $ $ $ A 340 50 40 10 10 В 290 30 10 40 10 320 40 10 10 40 Overhead rates for each department per rupee of direct labour are as follows : Dept. X $ 1.20 1.20 Dept. Y $ 0.40 2.00 Dept. Z Variable Overheads Fixed Overheads 1.00 1.40 Total 2.40 2.40 2.40 What will be your advice about the profitability of product B? Give reasons.