Question
Lakeside Incorporated produces a product that currently sells for $56 per unit. Current production costs per unit include direct materials, $15; direct labor, $17; variable
Lakeside Incorporated produces a product that currently sells for $56 per unit. Current production costs per unit include direct materials, $15; direct labor, $17; variable overhead, $10; and fixed overhead, $10. 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.
Required:
What would be the incremental profit or loss if Lakeside could sell the refined version of its product for $61 per unit?
Note: Do not round your intermediate calculations. Round your final answer to 2 decimal places. Loss amounts should be indicated with a minus sign.
Should it be processed further?
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