Elkhart, a Division of Indiana Enterprises, Currently Makes 100,000 Units

Multiple Choice

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

If Elkhart 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.