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Song, a division of Carolina Enterprises, currently makes 100,000 units of a product that has created a number of manufacturing problems. Song's costs follow. Manufacturing

Song, a division of Carolina Enterprises, currently makes 100,000 units of a product that has created a number of manufacturing problems. Song's costs follow.

Manufacturing costs:
Variable $ 550,000
Fixed 187,000
Allocated corporate administrative cost 61,000

If Song were to discontinue production, fixed manufacturing costs would be reduced by 90%. The relevant cost of deciding whether the division should purchase the product from an outside supplier is:

$550,000.

$737,000.

$568,700.

$779,300.

$718,300.

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