Sanchez Company engaged in the following transactions during Year 1:

• Started the business by issuing $13,700 of common stock for cash.
• The company paid cash to purchase $8,200 of inventory.
• The company sold inventory that cost $5,600 for $11,650 cash.
• Operating expenses incurred and paid during the year, $5,100.

Sanchez Company engaged in the following transactions during Year 2:

• The company paid cash to purchase $12,000 of inventory.
• The company sold inventory that cost $9,800 for $18,250 cash.
• Operating expenses incurred and paid during the year, $6,100.

Sanchez uses the perpetual inventory system. What is Sanchez's gross margin for the Year 2?

Multiple Choice

• $8,450.

• $6,250.

• $2,350.

• $9,800.