Illuminate Pty Ltd manufactures torch batteries. During the year ended 30 June, 10 million packets were manufactured and the following (taxation) costs incurred: administration costs $27,500 direct labour 210,000 factory overheads 130,000 interest on overdraft 7,500 raw materials purchased 160,000 sales expenses 45,000 warehouse rent 15,000

(a) Raw materials: opening stock of raw materials 30,000 closing stock 25,000

(b) Work in progress. Opening stock: nil. Of the 10 million units manufactured during the year, 9.7 million were sold (in addition to opening stock); 100,000 units complete and 200,000 units 50% complete remain on hand.

(c) Opening stock of finished goods was 100,000 ($5000).

Required: (i) What amounts are deductible/assessable to Illuminate under Div 70 (and other provisions)?

(ii) Calculate Illuminates closing stocks of raw material, work in progress and finished goods at the cost option.