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Lakeside Incorporated produces a product that currently sells for $60 per unit. Current production costs per unit include direct materials, $16; direct labor, $18;
Lakeside Incorporated produces a product that currently sells for $60 per unit. Current production costs per unit include direct materials, $16; direct labor, $18; variable overhead, $11; and fixed overhead, $11. 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: a. What would be the incremental profit or loss if Lakeside could sell the refined version of its product for $65 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. b. Should it be processed further? a. Incremental Profit (Loss) b. Should it be processed further?
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