It sounds like that shop you're going to is a little overpriced. Do yourself a favor and do some research on AKs before you go blowing $500 on an overpriced low quality one. There's a differance between a $300 WASR-10 and a $600 Arsenal with a milled receiver. Also, make sure you know what kind of ammo it shoots. I've seen a lot of people with AK-74 clones in stock. They look the same as a regular AK but they shoot 5.45x39 which is a LOT more rare and expensive than 7.62x39.

5280 Armory has pretty good prices on their AKs right now. I think their underfolders are $520. They also have WASR-10 side folders for a little over $400 and WASR-10s with fixed stocks for around $400. If you don't mind doing an FFL dealer transfer you can pick them up cheaper on line. It's a pain in the butt, though, and you usually don't end up saving enough to make it worth the hassle.