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Premier Corp expects to spend $800,900 in 2017 in appraisal costs if it does not change its incoming materials inspection method. If it decides to implement a new receiving method, it will save $60,500 in fixed appraisal costs and variable costs of $0.50 per unit of finished product. The new method involves $140,500 in training costs and an additional $150,300 in annual equipment rental. Internal failure costs average $250 per failed unit of finished goods, During 2016,6% of all completed items had to be reworked. External failure costs average $450 per failed unit. The company's average external failures are 2% of units sold. The company carries no ending inventories, because all jobs are on a per order basis and a just-in-time inventory ordering method is used. What would be the change in the external failure budget, if 600,300 units are used and assuming external failures are reduced by 12%. Select one: O 1. $648,324 decrease 2. $250,150 decrease O 3. $304,342 decrease O 4. $48,054 increase