Song,a Division of Carolina Enterprises,currently Makes 100,000 Units of a Product

question 60

Multiple Choice

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.
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:

• A)$540,000.
• B)$594,000.
• C)$666,000.
• D)$720,000.
• E)$726,000.

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