Collins Computers Stored Its Inventory in a Warehouse Which Suffered

Multiple Choice

Collins Computers stored its inventory in a warehouse which suffered a fire in late November, 2014. Their sales office was at a different location. In order to file a claim with the insurance company, the owners ask you to estimate the inventory in the warehouse. The following information is available: The company's gross profit has historically been 40% of Net sales revenue. Estimate the value of the inventory destroyed in the fire using the gross profit method.

A) $369,950
B) $528,550
C) $410,000
D) $388,450