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Lakeside Incorporated produces a product that currently sells for $46.80 per unlt. Current production costs per unit Include direct materlals, $13; direct labor, $15; varlable
Lakeside Incorporated produces a product that currently sells for $46.80 per unlt. Current production costs per unit Include direct materlals, $13; direct labor, $15; varlable overhead, $6.50; and fixed overhead, $6.50. Product engineering has determined that a certain part of the product converslon process could be outsourced. Raw materlal costs would not be affected, but direct labor and varlable overhead costs would be reduced by 30%. No other opportunity is currently feasible for 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 $5.20 per unlt? Note: Do not round your Intermedlate calculations. Round your final answer to 2 decimal places. b. Should Lakeside outsource part of the conversion process at a cost of $5.20 per unlt
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