The Browning 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 Browning's production activity for the year is: Sales Production Opening inventory 125,000 150,000 5,000 What is the value of closing inventory of finished goods under variable costing? 1) $420,000 2) $240,000 3) $120,000 4) $480,000