The James Company has the following expected costs at 12,000 units of activity. Direct materials are $200,000, direct labor is $130,000, variable overhead is $240,000 and fixed overhead is $400,000. They anticipate an increase in production next year to 15,000 units. Given that production expectation, total costs expected next year should be:

A. $970,000

B. $1,212,500

C. $1,112,500

D. $1,150,000