Ken Yalters, the COO of FreshSkin, asked his cost management team for a product line profitability analysis for his firm's two products - Askin and Bskin. The two products are skin care products that require a large amount of research and development and advertising. He received the report below. Ken concluded that Askin was the more profitable product, and that perhaps cost-cutting measures should be applied to the Bskin product.

	Askin	Bskin	Total
Sales	$4,000,000	$2,600,000	$6,600,000
Cost of goods sold	(2,600,000)	(2,100,000)	(4,700,000)
Gross profit	$1,400,000	$500,000	$1,900,000
Research and development			(1,170,000)
Selling expenses			(130,000)
Profit before taxes			$600,000

Seventy-five percent of the research and development and selling expenses were traceable to Askin. Profit before taxes for the Askin product, per life-cycle income statements, is:

		$175,000.
		$425,000.
		$522,500.
		$207,500.
		$332,500.