Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Asap pls Howard Cooper, the president of Glacier Computer Services, needs your help. He wonders about the potential effects on the firm's net income if

Asap pls
image text in transcribed
image text in transcribed
Howard Cooper, the president of Glacier Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal Year 1 Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative $ 60.00 32.00 5.76 3.44 $320,000 120,000 Required a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 30,000 hours of services in Year 1 b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, If Glacier charges customers $56 per hour, the firm can achieve 38,000 hours of services. Prepare a flexible budget using the consultant's assumption c. The same consultant also suggests that if the firm raises its rate to $64 per hour, the number of service hours will decline to 25,000 Prepare a flexible budget using the new assumption Complete this question by entering your answers in the tabs below. Required A Required B Required The same consultant also suggests that if the firm raises its Tate to $64 per hour, the number of service hours will decline to 25,000. Prepare a flexible budget using the new assumption. complete this question by entering your answers in the tabs delow. Required A Required B Required C The same consultant also suggests that if the firm ralses its rate to $64 per hour, the number of service hours will decline to 25,000. Prepare a flexible budget using the new assumption. $ 1,600,000 GLACIER COMPUTER SERVICES Pro Forma Income Statement Flexible Budget Services revenue Variable costs: Labor cost Overhead cost Selling, general, and administrative costs S 1,600,000 Fixed costs: Facility maintenance Selling, general, and administrative costs Overhead cost 320,000 120,000 $ 1,160,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Management In The Sport Industry

Authors: Matthew T Brown, Daniel Rascher, Mark S Nagel, Chad McEvoy

2nd Edition

9781621590118

More Books

Students also viewed these Accounting questions

Question

Why should an individual manager be interested in supporting HR?

Answered: 1 week ago