The Star Company's inventory was partially destroyed on July 4, 2004, when its warehouse caught on fire early in the morning. Inventory that had a cost of $7,500 was saved. The accounting records, which were located in a fireproof vault, contained the following information:

Sales (1/1/04 through 7/3/04)	$250,000
Purchases (1/1/04 through 7/3/04)	180,000
Inventory (1/1/04)	45,000
Gross Profit Ratio	25% of cost

Using the gross profit method, what is the estimated cost of the inventory destroyed by the fire?

a.	$17,500
b.	$25,000
c.	$30,000
d.	$37,500