Burgandy Corp Materials Usage Has a Rate of $5 Per Part and It

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: $$\begin{array} { | l | l | r | r | c | } \hline \text { Activities } & \text { Activity Driver } & \begin{array} { c } \text { Activity } \\\text { Capacity }\end{array} & \begin{array} { c } \text { Current } \\\text { Activity } \\\text { Demand }\end{array} & \begin{array} { c } \text { Expected } \\\text { Activity } \\\text { Demand }\end{array} \\\hline \text { Materials usage } & \text { Number of parts } & 250,000 & 250,000 & 100,000 \\\hline \text { Assembling parts } & \text { Direct labor hours } & 15,000 & 15,000 & 6,000 \\\hline \text { Purchasing parts } & \text { Number of orders } & 18,000 & 14,000 & 7,000 \\\hline\end{array}$$
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) $780,000
B) $820,000
C) $750,000
D) $120,000