Business managers frequently operate in a world where data are not readily available.

Two independent situations follow:

Company 1 Company 2 Direct material used 10.000 20.000 Direct labor 5.000 13.000 Manufacturing overhead 12.000 ? Total manufacturing cost ? 35.000 Beginning work in process 15.000 Ending Work in process 6.000 17.500 Cost of goods manufactured 23.000 ? Sales 35.000 50.000 Beginning Finish goods 10.000 ? Cost of goods manufactured ? Goods available for sale Ending Finish goods 12.000 15.000 Cost of goods sold 26,000 Gross Margin Selling and administrative expense 3.500 ? Net Operating Income 7 17.000