Problem 5: Business Managers frequently operate in a world where data are not readily available. Imagine a situation in which a company experiences a catastrophic event and must reconstruct its accounting data.

Consider the following independent situation in which selected data are missing:

Company 1 Company 2 Direct Material Used 9,000 19,000 Direct labor 4,000 14,000 Manufacturing overhead 11,000 ? Total Manufacturing Cost 35,000 Beginning Work in Process 15,000 Ending Work in Process 6,000 13,500 Cost of Goods Manufactured 21,000 ? Sales 35,000 50,000 Beginning Finish goods Inv. 7,000 Cost of goods Manufactured ? Goods available for sale ? Ending Finish goods Inv. 10,000 14,000 Cost of Goods Sold 25,500 Gross Margin Selling and administrative Exp. 7,000 ? Net Operating Income ? 15,500