Burgandy Corp. is a manufacturer of equipment used in manufacturing. It currently produces a product with 20 parts. Through redesign, it has reduced the number of parts to 8. The current activity capacity and demand for the 20 unit configuration and expected activity demand for the 8 part configuration are provided below:

Activities	Activity Driver	Activity Capacity	Current Activity Demand	Expected Activity Demand
Materials usage	Number of parts	250,000	250,000	100,000
Assembling parts	Direct labor hours	15,000	15,000	6,000
Purchasing parts	Number of orders	18,000	14,000	7,000

Materials usage has a rate of $5 per part and no fixed costs. Assembly has a rate of $25 per labor hour with no fixed component. Purchasing requires two clerks that can process 2,000 purchase orders. Each clerk earns $33,000 per year. There is also a $2 per order processing cost. What are the savings in materials usage cost with the new design changes?

a. $820,000

b. $780,000

c. $120,000

d. $750,000