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Lakeside Incorporated produces a product that currently sells for $90.00 per unit. Current...

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Accounting

Lakeside Incorporated produces a product that currently sells for $90.00 per unit. Current production costs per unit include direct materials, $25; direct labor, $27; variable overhead, $12.50; and fixed overhead, $12.50. 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:
What would be the net cost advantage or disadvantage if Lakeview decided to outsource part of the conversion process at a cost of $10.00 per unit?
Note: Do not round your intermediate calculations. Round your final answer to 2 decimal places.
Should Lakeside outsource part of the conversion process at a cost of $10.00 per unit?

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