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Lakeview Engne, Inc produces engines or he watercraft ndstry. An outside manu turer has offered to sup y everal component pa s used in the
Lakeview Engne, Inc produces engines or he watercraft ndstry. An outside manu turer has offered to sup y everal component pa s used in the engine assemblies, which are cu en y being produced by Lake The suppier will charge Lakeview 285 per engine for the set o parts. Lake new's current costs for those part sets are direct mate als, $145; direct labor, $75; and manufacturing overhead applied at 100% of direct labor. Vanable manufacturing overhead s considered to be 20% of the otal and fixed overhead ill not change i the part sets are acquired from the outside supplier. a. What would be the nat cost advantage or disadvantage if Lakeview decided to purchase the parts
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