7) Chocolate Company is considering the production of a new product. Chocolate Company has the following data available:

Expected sales(units) over product life 15,000

Variable production costs $42 per unit

Variable selling costs $16 per unit

Annual fixed production costs $15,000

Annual fixed selling costs $5,000

Research and development costs $184,000

What is the total variable cost of the product over the product life cycle?

A) $204,000

B) $716,000

C) $870,000 (THIS IS THE ANSWER, PLEASE EXPLAIN WHY)

D) $880,000