After conducting a market research study, Lorax Manufacturing decided to produce a new interior door to complement its exterior door line. It is estimated that the new interior door can be sold at a target price of $60. The annual target sales volume for interior doors is 20,000. Schultz has target Profit (Operating Income) of 20% of sales.

What is the target cost?

Select one:

a.$1,600,000

b.$1,440,000

c.$960,000

d.$800,000

show calculation please