Question
Rice Products Pty. Ltd. is a local firm that produces two moulded plastic products: kickboards and pool buoys. The products are manufactured in a two
Rice Products Pty. Ltd. is a local firm that produces two moulded plastic products: kickboards and pool buoys. The products are manufactured in a two step process and each process is treated as a separate cost centre. In the first process, the mixing department, a special resin is combined with a hardener. Moulding occurs in the second process where the output from the mixing department is poured into special shaped moulds. Due to the nature of the chemical compounds contained in the resin and hardener, the manufacturing process occurs very rapidly. Production is therefore scheduled so that no work-in-process inventory is held at the end of each day.
The following information has been extracted from the accounting records of Rice Products or obtained through discussions with the senior management team:
1. Balance Sheet (Statement of Financial Position) as at 30 June 2020:
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