A fire destroyed a warehouse of the Goren Group, Inc., on May 4, 2011. Accounting records on that date indicated the following:
![1002_254-B-A-V-I (791).png](https://secure.tutorsglobe.com/CMSImages/1002_254-B-A-V-I (791).png)
The gross profit ratio has averaged 20% of sales for the past four years.
Required:
Use the gross profit method to estimate the cost of the inventory destroyed in the fire.