On July 1, year 1, Allo Company purchased a tract of land for $900,000. Additional costs of $150,000 were incurred in subdividing the land during July through December year 1. Of the tract acreage, 70% was subdivided into residential lots as shown below and 30% was conveyed to the city for roads and a park.

Lot class		Number of lots			Sales price per lot
A		100			$12,000
B		100			8,000
C		200			5,000

Under the relative sales value method, the cost allocated to each Class A lot should be

1. $2,625

2. $2,940

3. $3,600

4. $4,200