T-Shirt Man is a direct marketer of popular t-shirts. Following is information

T-Shirt Man is a direct marketer of popular t-shirts. Following is information about its revenue and cost structure:

Selling Price: $15/t-shirt

Variable Costs:

Production (manufacturing costs): $3/t-shirt

Selling and Administration (non-mfg costs): $1/t-shirt

Fixed Costs:

Production (manufacturing costs): $1000000/ year

Selling and Administratioin (non-mfg cost): $2000000/year

Assume 400000 t-shirts are produced and 350000 are sold in 2011. What is ending inventory under variable costing?

a) $325000

b) $200000

c) $275000

d) $150000

(Please explan to me how you found the answer)