The make or buy decision In addition to the product cost information for Lakeside, Inc., in Mini-Exercise 16.1, 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:
Should Lakeside outsource part of the conversion process at a cost of $4 per unit?
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