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) $410,000
C) $396,000
D) $329,000