Question: Granite Electronics, Inc., operates a Sensor Division that designs and manufactures a range of products, including a standard sensor suitable for use in another division

Granite Electronics, Inc., operates a Sensor Division that designs and manufactures a range of products, including a standard sensor suitable for use in another division of the company, the Defense Systems Division, in one of its devices. The specifications for this sensor are detailed below:
Capacity in units
68,000
Selling price to outside customers
$68
Variable cost per unit
$34
Fixed cost per unit (based on capacity)
$ 22
The Defense Systems Division currently imports 4,000 of these sensors annually from an international supplier at a price of $66 each.
Assuming that the Sensor Division is selling all of the sensors it can produce to external customers, what would be the lost contribution margin if the sensors were transferred internally rather than sold externally?

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