A. Falcon Environmental Services, Inc. provides consulting services to power plants . The consulting firms contribution-margin ratio is 15 percent, and its annual fixed expenses are $135,000. The firms income-tax rate is 35 percent.

Required:

1. Calculate the firms break-even volume of service revenue.
2. How much before-tax income must the firm earn to make an after-tax net income of $65,000?
3. What level of revenue for consulting services must the firm generate to earn an after-tax net income of $65,000?

Suppose the firms income-tax rate rises to 45 percent. Explain what will happen to the break-even level of consulting service revenue