Ocean Grove Vending Company Has Invested $980,000 in a Plant

Multiple Choice

Ocean Grove Vending Company has invested $980,000 in a plant to make vending machines. The target operating income desired from the plant is $196,000 annually. The company plans annual sales of 1600 vending machines at a selling price of $1100 each.
What is the cost base of each vending machine for Ocean Grove Vending Company?

A) $1100
B) $1422
C) $978
D) $613