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Howard Cooper, the president of Adams Computer Services, needs your help. He wonders about the potential effects on the firm's net income if he changes
Howard Cooper, the president of Adams 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 3. Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 41,000 hours of services in Year 3. b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Adams charges customers $85 per hour, the firm can achieve 49,000 hours of services. Prepare a flexible budget using the consultant's assumption. c. The same consultant also suggests that if the firm raises its rate to $95 per hour, the number of servine he 37,000 . Prepare a flexible budget using the new assumption. Complete this question by entering your answers in the tabs below. Orepare the pro forma income statement that would appear in the master budget if the firm expects to provide 41,000 hours of services in Year 3. Complete this question by entering your answers in the tabs below. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, if Adams charges customers $85 per hour, the firm can achieve 49,000 hours of services. Prepare a flexible budget using the consultant's assumption. Complete this question by entering your answers in the tabs below. The same consultant also suggests that if the firm raises its rate to $95 per hour, the number of service hours will decline t 37,000 . Prepare a flexible budget using the new assumption
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