1. On24Decemberafterthecloseofbusiness,adevastatingfireatSolarisPharmaceuticaldestroyedthefirm'srawmaterialsandfinishedgoodsinventories.Thefollowinginformationis available:

	$
Salesrevenue, 1Januaryto24 December	1,980,000
Purchases,1 Januaryto24 December	270,000
Directlabour cost, 1Januaryto24December	720,000
Costofgoodsavailableforsale,1 Januaryto24December	1,500,000
Rawmaterialinventory,1January	60,000
Finishedgoodsinventory,1January	222,000
Grossprofitmargin	30%

Thefirm'saccountantdeterminesthatthecostofdirectmaterialsusednormallyaverages25%ofprimecosts.

Required:

SolarisPharmaceuticalisintheprocessofnegotiatingasettlementwithitsinsurancecompany.Computeanestimateonthecostofthefollowingthatweredestroyed bythefire:

1. Rawmaterial inventory.

1. Finishedgoods inventory.