Operations began May 1. Sales are budgeted to increase as $15,000, $17,000, and $20,000 for the first three months. Ending inventory is 75% of the next month's projected sales. Ending inventory for June is:

$7,500 if the gross profit rate is 50%.

$11,250.

$15,000.

$5,625 if the gross profit rate is 50%.