After conducting a phone survey, Bad Backs Manufacturing decided to produce a new computer backpack to complement its backpack line. It is estimated that the new computer backpack can be sold at a target price of $80. The annual target sales volume for computer backpacks is 18,000. Bad Backs has target operating income of 25% of sales.

What is the target cost?

A.

$1,440,000

B.

$960,000

C.

$1,600,000

D.

$1,080,000

E.

$800,000