Executive Solutions is a strategy consulting firm. Other than the senior leadership (who manage the firm, but do not actively consult), the managers and staff are billed to clients on an hourly basis. The workload varies quite a bit from month to month requiring careful planning.

Managers are billed to clients at a rate of $920 per hour and staff at a rate of $460 per hour. Managers are paid $245 per hour worked (including nonbillable time) and staff are paid $135 per hour. The current plan calls for managers to bill 1,220 hours in May and 770 hours in June. Staff are expected to bill 6,440 hours in May and 4,540 hours in June. Managers will work a total of 2,440 hours in both months and staff will work a total of 9,640 hours in both months.

Other monthly costs (all fixed) are $551,000 SG&A, $226,000 in depreciation, and $351,000 in marketing.

Required:

Prepare a budgeted income statement for Executive Solutions for May and June (separately).

EXECUTIVE SOLUTIONS
Budgeted Income Statement
	May	June
Revenues:
Managers
Staff
Total revenue
Expenses:
Manager compensation
Staff compensation
Total compensation
SG&A
Depreciation
Marketing
Total expenses
Income (Loss)