Curtis Salter, the president of Kasimer 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 2015. Standard rate and variable costs Service rate per hour $ 86.00 Labor cost 32.00 Overhead cost 6.90 Selling, general, and administrative 3.60 cost Expected fixed costs Facility maintenance $519,000 Selling, general, and administrative 141,000 Required a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 32,000 hours of services in 2015. KASIMER COMPUTER SERVICES Pro Forma Income Statement Master Budget Variable costs 0 Fixed costs $ 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 consultant's analysis, if Kasimer charges customers $81 per hour, the firm can achieve 37,000 hours of services. Prepare a flexible budget using the consultant's assumption. KASIMER COMPUTER SERVICES Pro Forma Income Statement Flexible Budget Variable costs Fixed costs $ 0 c. The same consultant also suggests that if the firm raises its rate to $91 per hour, the number of service hours will decline to 29,000. Prepare a flexible budget using the new assumption KASIMER COMPUTER SERVICES Pro Forma Income Statement Flexible Budget Variable costs Fixed costs 0