ABC Consulting Firm offers comprehensive IT services. Financial data for the year 2023 is provided below:

Ledgers:

• Service Revenue: $25,000,000
• Salaries and Benefits: $12,000,000
• Rent Expense: $1,000,000
• Depreciation Expense: $500,000
• Marketing Expenses: $2,000,000

Requirements:

• Prepare ABC Consulting Firm's income statement for the year ended December 31, 2023.
• Calculate the Contribution Margin and Operating Income.
• Determine the Net Income after taxes using a tax rate of 30%.
• Analyze the impact of a 15% reduction in marketing expenses on profitability.
• Discuss how fixed costs affect ABC Consulting Firm's break-even point.