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	$	4,008,000			$	2,604,000			$	6,612,000
Cost of goods sold		(2,604,000	)			(2,108,000	)			(4,712,000	)
Gross profit	$	1,404,000			$	496,000			$	1,900,000
Research and development										(1,178,000	)
Selling expenses										(134,000	)
Profit before taxes									$	588,000

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:

a. $170,000.

b. $420,000.

c. $517,500.

d. $202,500.

e. $327,500.