Drill Quest,Inc

Drill Quest,Inc.manufactures drill bits for the oil industry.Drill Quest uses cost-plus pricing to set the price of its bits.Currently Drill Quest applies a 50 percent markup on average total cost.Average variable cost of producing bits is constant and equal to $6,000 per bit.Total fixed cost at Drill Quest is $550,000.DrillQuest currently produces 690 bits.Statistical estimation of demand for Drill Quest brand bits produces the following linear demand equation where Q is the number of bits demanded and P is the price of bits) : Using the cost-plus price,Drill Quest earns profit of approximately) $___________ by selling 690 bits.

A) $2,895,000
B) $2,345,000
C) $3,500,000
D) $3,895,000
E) $4,895,000