Stubbs Company uses the perpetual inventory method. On January 1, Year 1, Stubbs purchased 700 units of

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Stubbs Company uses the perpetual inventory method. On January 1, Year 1, Stubbs purchased 700 units of inventory that cost $5.00 each. On January 10, Year 1, the company purchased an additional 600 units of inventory that cost $3.75 each. If Stubbs uses a weighted average cost flow method and sells 1,000 units of inventory for $10.00 each, the amount of gross margin reported on the income statement will be:

A. 5746

B. 7250

C. 5580

D. 8125