Simm Co. has determined its December 31 inventory on a LIFO basis to be $400,000. Information pertaining to the inventory follows:

	Estimated selling price	$408,000
	Estimated cost of disposal	20,000
	Normal profit margin	60,000
	Current replacement cost	390,000

At December 31, what should be the amount of Simm's inventory?

$400,000

$390,000

$388,000

$328,000

correct answer is 388,000