The Brewing Company manufactures a single product; the standard costs per unit being variable manufacturing $8, fixed manufacturing $6. Selling and administrative costs are $2 per unit sold. The selling price is $20 per unit. Actual and budgeted fixed overhead is $900 000 for the year. Information about Brewings production activity for the year is

Sales 125 000 units

Units produced 150 000 units

What is the value of closing inventory of finished goods under variable costing?

Select one:

$420 000

$120 000

$400 000

$480 000