The Tam Company uses the retail inventory method and the average cost flow assumption for preparation of its interim reports. Information about Tam's inventory in the second quarter of 2004 is shown below:

Cost Retail

Beginning inventory $400 $ 600

Purchases $ 800 $1,720

Net markups $ 320

Net markdowns (240)

Sales 1,300

What is the estimated cost of Tam's inventory on June 30, 2004? a. $550 b. $480 c. $428 d. $520