Mini-Exercise 16-3 (Static) The make or buy decision LO 2, 3 Lakeside Inc. produces a product that currently sells for $36 per unit. Current production costs per unit include direct materials, $10; direct labor, $12; variable overhead, $5; and fixed overhead, $5. Product engineering has determined that a certain part of the product conversion process could be outsourced. Raw material costs would not be affected, but direct labor and variable 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 $4 per unit? (Round your final answer to 2 decimal places.) b. Should Lakeside outsource part of the conversion process at a cost of $4 per unit? Yes No