Howard Cooper, the president of Gibson 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. Standard rate and variable costs Service rate per hour Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 81.00 39.00 7.10 4.00 $516,000 140,000 Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 35,000 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 Gibson charges customers $76 per hour, the firm can achieve 45,000 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 $86 per hour, the number of service hours will decline to 31,000. Prepare a flexible budget using the new assumption. Required A Required B Required C Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 35,000 hours of services in Year 3. GIBSON COMPUTER SERVICES Pro Forma Income Statement Master Budget Services revenue Variable costs: Labor cost Overhead cost Selling, general, and administrative costs Contribution margin $ 0 Fixed costs: $ 0 Required A Required B > Required A Required B Required C 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 Gibson charges customers $76 per hour, the firm can achieve 45,000 hours of services. Prepare a flexible budget using the consultant's assumption. GIBSON COMPUTER SERVICES Pro Forma Income Statement Flexible Budget Variable costs: $ 0 Fixed costs: $ 0