A note to the financial statements of Highland Inc. at December 31, 2013, reads as follows:

Because of the manufacturer's production problems for our Humdinger Limited line, our inventories were unavoidably reduced. Under the LIFO inventory accounting method currently being used for tax and financial accounting purposes, the net effect of all the inventory changes was to increase pretax income by $1,000,000 over what it would have been had the inventory of Humdinger Limited been maintained at the normal physical levels on hand at the start of the year.

The unit purchase price of the merchandise was $25 per unit during the year. Highland Inc. uses the periodic inventory system. Additional data concerning Highland's inventory were as follows:

Date Physical..............................Count of Inventory..............LIFO Cost of Inventory

January 1, 2013..............................500,000 units................................$ ?

December 31, 2013........................400,000 units ................................$3,600,000

1. What was the unit average cost for the 100,000 units sold from the beginning inventory?

2. What was the reported value for the January 1, 2013, inventory?