ABC, Inc. estimates the cost of its physical inventory at March 31 for use in an interim financial statement. The rate of markup on cost is 25%. The following account balances are available:

Inventory, March 1 $550,000

Purchases 430,000

Purchase returns 20,000

Sales during March 750,000

The estimate of the cost of inventory at March 31 would be

A) $280,000. B) $360,000. C) $397,500. D) $210,000.