Cork Company imports and sells a product produced in Canada. In the summer of 2011, a natural disaster disrupted production, affecting its supply of product. Cork uses the LIFO inventory method. On January 1, 2011, Cork's inventory records were as follows:
|
Year purchased
|
Quantity (units)
|
Cost per unit
|
Total cost
|
|
2009
|
2,000
|
$40
|
$ 80,000
|
|
2010
|
5,000
|
$55
|
275,000
|
|
Total
|
7,000
|
|
$355,000
|
Through mid December of 2011, purchases were limited to 8,000 units, because the cost had increased to $80 per unit. Cork sold 14,200 units during 2011 at a price of $98 per unit, which significantly depleted its inventory.
Assume that Cork makes no further purchases during 2011. Compute Cork's gross profit for 2011.