McKay Sports uses the dollar-value LIFO retail method. The pricelevel index on January 1, 1994, was 100, and on that date the inventory was $10,000 (retail) and $7,000 (cost). Additional information follows: Compute the cost of the December 31, 1995, inventory.

1994 1995

Purchases, retail $80,000 $102,000

Purchases, cost 57,600 75,480

Sales 80,208 101,080

Price-level index, Dec. 31 102 103

Compute the cost of the December 31, 1995, inventory.

a. $7,304.88 b. $7,318.64 c. $7,329.76 d. $7,926.88

Please show the step.