Super Drive, a computer disk storage and back-up company, uses accrual accounting. The company's Statement of Financial Position for the year ended November 30, is as follows:

Super Drive

Statement of Financial Position

November 30

Assets   

Cash                                $52,000

Accounts receivable, net.                150,000

Inventory                             315,000

Property, plant and equipment          1,000,000

Total assets                         $1,517,000

Liabilities and Equity   

Accounts payable                     $175,000

Common stock                        900,000

Retained earnings                     442,000

Total liabilities and shareholders equity   $1,517,000

Additional information regarding Super Drive's operations include the following:

l  Sales are budgeted at $520,000 for December and $500,000 for January of the next year.

l  Collections are expected to be 60% in the month of sale and 40% in the month following the sale.

l  80% of the disk drive components are purchased in the month prior to the month of sale, and 20% are purchased in the month of sale. Purchased components are 40% of the cost of goods sold.

l  Payment for the components is made in the month following the purchase.

l  Cost of goods sold is 80% of sales.

The projected gross profit for the month ending December 31 is

A. $104,000

B. $416,000

C. $536,000

D. $134,000