Exercise 13-42 (Algo) Budgeting in a Service Organization (LO 13-6, 7) 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 $1,090 per hour and staff at a rate of $545 per hour. Managers are paid $415 per hour worked (including nonbillable time) and staff are paid $220 per hour. The current plan calls for managers to bill 1,390 hours in May and 940 hours in June. Staff are expected to bill 6,780 hours in May and 4,880 hours in June. Managers will work a total of 2,780 hours in both months and staff will work a total of 9,980 hours in both months. Other monthly costs (all fixed) are $559,500 SG&A, $234,500 in depreciation, and $359,500 in marketing. Required: Prepare a budgeted income statement for Executive Solutions for May and June (separately).