Polynesian Products Sells 1 800 Kayaks Per Year at a Price

Polynesian Products sells 1 800 kayaks per year at a price of $480 per unit. Polynesian sells in a highly competitive market and uses target pricing. The company has calculated its target full cost at $729 000 per year. Fixed costs are $400 000 per year and CANNOT be reduced. How much are the target variable costs?

A) $265 000
B) $396 000
C) $329 000
D) $410 000