Mini-Exercise 16-1 (Algo) Sell or process further? LO 16-2, 16-3

Lakeside Incorporated produces a product that currently sells for $52 per unit. Current production costs per unit include direct materials, $14; direct labor, $16; variable overhead, $9; and fixed overhead, $9. 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 $57 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?