XYZ. Manufactures jet engines for the UK armed forces on a cost-plus basis. The production cost of a particular jet engine is shown below:

Direct material 200000

Direct labor 150000

Supervisor salaries 35000

Depreciation 12000

Rent 11000

If production of this engine was discontinued, the production capacity would be idle, and the supervisor would be laid off. The depreciation referred to above is for special equipment that would have no resale value and that does not wear out through use. When asked to bid on the next contract for this engine, the minimum unit price that Power Systems should bid is:

a.

none of answers are correct

b.

408000

c.

385000

d.

365000