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 $980 per hour and staff at a rate of $490 per hour. Managers are paid $305 per hour worked (including nonbillable time) and staff are paid $165 per hour. The current plan calls for managers to bill 1,280 hours in May and 830 hours in June. Staff are expected to bill 6,560 hours in May and 4,660 hours in June. Managers will work a total of 2,560 hours in both months and staff will work a total of 9,760 hours in both months, Other monthly costs (all fixed) are $554,000 SG&A, $229,000 in depreciation, and $354,000 in marketing. Required: Prepare a budgeted income statement for Executive Solutions for May and June (separately). EXECUTIVE SOLUTIONS Budgeted Income Statement Revenues: Managers Staff Total revenue Expenses Manager compensation May June $ $ 0