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Lakeside Inc. produces a product that currently sells for $66.00 per unit. Current production costs per unit include direct materials, $24, direct labor, $26; variable

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Lakeside Inc. produces a product that currently sells for $66.00 per unit. Current production costs per unit include direct materials, $24, direct labor, $26; variable overhead, $12.00; and fixed overhead, $12.00. Product engineering has determined that certain production changes could refine the product quality and functionality. These new production changes would increase material and labor costs by 20% per unit. Lakeside has received an offer from a nonprofit organization to buy 9,400 units at $62.60 per unit. Lakeside currently has unused production capacity Required: a. Calculate the effect on Lakeside's operating income of accepting the order from the nonprofit organization. Answer is not complete. Increase in operating income b. Should Lakeside accept this special sales order? Yes NO

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