1.   Smith Company manufactures lawn mowers. The firmhad the following inventories.

Jan 1, 2019 Dec 31, 2019
       Finished goods      $142,000   $ 92,000
       Work in process      $262,000   $426,000
       Materials          $114,000   $90,000

   The following additional data pertains tooperations.
   Material purchased      $150,000   Property Taxes Factory   $7,500
   Direct labor          $400,000  Utilities-Factory       $15,000
   Depreciation-Factory Equip   $25,000   Insurance-Factory      $ 4,500
   Factory Supervisor Salaries  $227,500   Selling and Admin Expense  $200,000

Alex Company applies manufacturing overhead at the rate of 60percent of direct-labor cost.

   Required:
   Compute the following amounts for the year of2019.
a.   Create a Statement of Cost of Goods Manufactured ingood form (use the format presented in Chapter 15).
b.   Compute Cost of Goods Sold for 2019.
c.   Assume Smith Company wants to achieve a Gross Profitof 30% of Sales -- Compute the total dollar amount of Salesneeded.
d.   Show Smith Company's Income Statement for 2019 usingthe answers you derived in (b) and (c).
e.   Was overhead under or over applied and by howmuch?
f.   Show the journal entry for (e) assuming the amountis considered to be small.
g.   What effect, if any, will the amount in (e) have onnet income. Explain and show the computation.
h.   Why does overhead need to be applied? Explain.
i.   If Smith estimated overhead for the year to be$252,000, what amount was the original estimate for direct laborcost?