Mittan Products, Inc., has a Antennae Division that manufactures and sells a number of products, including a standard antennae that could be used by another division in the company, the Aircraft Products Division, in one of its products. Data concerning that antennae appear below: Capacity in units 68,000Selling price to outside customers$68Variable cost per unit$34Fixed cost per unit (based on capacity)$22?The Aircraft Products Division is currently purchasing 4,000 of these antennaes per year from an overseas supplier at a cost of $66 per antennae.?Assume that the Valve Division is selling all of the valves it can produce to outside customers. From the standpoint of the Valve Division, what is the lost contribution margin if the valves are transferred internally rather than
sold to outside customers?
A. $2,312,000
B. $136,000
C. $152,000
D. $48,000
Answer: B
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