Curtis Salter, the president of Kasimer Computer Services, needs your help. He wonders about the potential effects on the firms net income if he changes the service rate that the firm charges its customers. The following basic data pertain to fiscal year 2015.

Standard rate and variable costs
Service rate per hour	$	88.00
Labor cost		31.00
Overhead cost		7.10
Selling, general, and administrative cost		3.90
Expected fixed costs
Facility maintenance	$	523,000
Selling, general, and administrative		146,000

Required

a.	Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 34,000 hours of services in 2015.

b.	A marketing consultant suggests to Mr. Salter that the service rate may affect the number of service hours that the firm can achieve. According to the consultants analysis, if Kasimer charges customers $83 per hour, the firm can achieve 41,000 hours of services. Prepare a flexible budget using the consultants assumption.

c.	The same consultant also suggests that if the firm raises its rate to $93 per hour, the number of service hours will decline to 27,000. Prepare a flexible budget using the new assumption.

My Grades MBA-50 x M Probl ms Chapter 15 an x C Chegg study l Guided sc x tsla-10k 20151231.htm x c O ezto mheducation.com. E Apps E Google Docs create YouTub M MyCLU Sign In M McGraw-Hill Connect M Multiple choice Quiz L Kindle Cloud Reader M Gmail Z Zotero I Home D Cengage Learning L Other bookmarks 390 Selling, general, and administrative cost Expected fixed costs $523.000 Facility maintenance 146,000 Selling, general, and administrative Required a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 34,000 hours of services in 2015. KASIMER COMPUTER SERVICES Pro a Income Statement Master Budget Variable costs Fixed costs Screenshot saved The screenshot was added to your OneDrive. OneDrive b. A marketing consultant suggests to Mr. Salter that the service rate may affect the number of service E- O here to search Type 5/6/2017