Howard Cooper, the president of Glacier 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 $ $60\mathrm{.}00$

Labor cost $32\mathrm{.}00$

Overhead cost $5\mathrm{.}76$

Selling, general, and administrative cost $3\mathrm{.}44$

Expected fixed costs

Facility maintenance $ $320,000$

Selling, general, and administrative $120,000$

Required

Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide $30,000$ hours of services in Year $3.$

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$$s analysis, if Glacier charges customers $$56$ per hour, the firm can achieve $38,000$ hours of services. Prepare a flexible budget using the consultant$$s assumption.

The same consultant also suggests that if the firm raises its rate to $$64$ per hour, the number of service hours will decline to $25,000.$ Prepare a flexible budget using the new assumption