Critical Thinking Cases CASE $16\mathrm{.}1$ Effect on Income Statement of Errors in Handling Manufacturing Costs LO$16-3,$ LO$16-4,$ LO$16-6$ statement, which is unsatisfactory in several respects:WEST TEXAS GUITAR COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER $31$ expenses. Also, the correct ending inventories are as follows: As this is the first year of operations, there were no beginning inventories. Instructions b$.$ Prepare schedules to determine the following: $1.$ The cost of direct materials used. $2.$ Total manufacturing overhead. c$.$ Prepare a schedule of cost of finished goods manufactured during the year. $($Use the amounts computed in part $\backslash (\backslash$mathbf$\{$b$\}\backslash )$ as the costs of direct materials used and manufacturing overhead.$)$ d$.$ Prepare a corrected income statement for the year, using a multiple$-$step format. Assume that income tax expense amounts to $30$ percent of income before income taxes.