I'm on the Engineering side and $400 buys you parts for A LOT more phone than that, especially with that screen size.
Are they planning on having the phones individually hand-assembled by Degree holding Electronics Engineers in the US - hence the manpower costs are insane - or is it a situation of putting a jet engine on a small car (tons of memory and a big processor on something with a far too small screen to be useful for most things, especially gaming)?
I bet the price bares no relation to the actual product manufacturing costs.
An Oppo A5M 4G costs around a bit over $150 in AliExpress and that's including the VAT for Europe (which will be the VAT of whatever country they imported it into, normally around 20%).
This thing has a 1080p 7" screen, which judging by the pictures is more than that Commodore phone.
Electronics are expensive for these things but that's when you're aiming for heavy use such as gaming, and that means larger/higher-density screen, more CPU/GPU power and bigger battery to feed those all the things as well as more memory and storage, which are the most expensive parts. LTE modules are comparativelly cheap nowadays, as are stupidly high resolution cameras and good DACs.
The only reason I would see for this to end up in the expensive electronics range is if they're aiming for it to run heavier AI models locally, which might very well be the case since judging by what others said the CEO of the company which bought the Commodore brand is AI-bro.