Lakeside Inc. produces a product that currently sells for $82.80 per unit. Current production costs per unit include direct materials, $23; direct labor, $25; variable overhead, $11.50; and fixed overhead, $11.50. Product engineering has determined that a certain part of the product conversion process could be outsourced. Raw material costs would not be affected, but direct labor and variable overhead costs would be reduced by 30%. No other opportunity is currently feasible for the unused production capacity.

Required:
a. What would be the net cost advantage or disadvantage if Lakeview decided to outsource part of the conversion process at a cost of $9.20 per unit?