Sultan uses the retail inventory method to estimate its inventory for interim statement purposes. Data relating to the inventory computation at June 30, 2014 are as follows:

Cost Retail

Inventory, Jan 1 820,000 1,262,800

Net Purchases 2,280,000 3,607,200

Net Markups 450,000

Net Markdowns 320,000

Sales 4,350,000

Sales Returns 300,000

Employee Discount 100,000

Sales Discount 80,000

Normal Shrinkage 50,000

What is the estimated cost of June 30, 2014 inventory using the average approach?

a. 496,000

b. 616,000

c. 466,000

d. 800,000