Cranks, starts, dies on 2000 Volkswagen Cabrio

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Have checked & replaced fuel filter. Took to shop, diagnostic cost $179, say it is due to ignition distributor. Cost to replace plus part $387, total w/diagnosis about $566. This sound reasonable? Where is the part located, Cannot find this in repair estimator online.
(1) Answer
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Thank you, but where is the part located, and how long does it actually take to install? The part cost is $268.00, so labor from the shop is $120. appreciate your help as we are struggling to pay utilities, much less a $500+ car repair. That means practically no food on the table.
The distributor is located at the top of the engine, and goes down into it. The distributor cap is on top of it, and spark plug wires connect here.

It's about an hour labor. The parts and labor are accurate. I feel your financial pain, and know how hard these decisions are to rationalize. It is what it is, in the end, provided you have a diagnosis you can count on.
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You are paying too much. Shop around....
list price isnt that much!!!!
Also its a fairly easy job...