Lorillard Corporation has the following information for April, May, and June 2018:

	April	May	June
Units produced	12,500	12,500	12,500
Units sold	8,750	10,625	13,125
Production costs per unit (based on 12,500 units) are as follows:
Direct materials		$ 15
Direct labor		10
Variable factory overhead		7.50
Fixed factory overhead		5
Variable selling and admin. expenses		12.50
Fixed selling and admin. expenses		5

There were no beginning inventories for April 2018, and all units were sold for $50. Costs are stable over the three months. What is the June ending inventory cost for Lorillard Corporation using the variable costing method?

a.$75,000

b.$125,000

c.$162,500

d.$187,500