Problem

The make or buy decision In addition to the product cost information for Lakeside, I...

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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