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Song, a division of Carolina Enterprises, currently makes 120,000 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 120,000 units of a product that has created a number of manufacturing problems. Song's costs follow.

Manufacturing costs:
Variable $ 560,000
Fixed 183,000
Allocated corporate administrative cost 65,000

If Song were to discontinue production, fixed manufacturing costs would be reduced by 70%. The relevant cost of deciding whether the division should purchase the product from an outside supplier is:

$743,000.

$688,100.

$753,100.

$560,000.

$614,900.

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