Howard Cooper, the president of Zachary 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 1. Standard rate and variable costs Service rate per hour Overhead cost Labor cost os Expected fixed costs Selling, general, and administrative cost Facility maintenance Selling, general, and administrative Required: $ 87.00 36.00 6.80 4.30 $522,000 143,000 a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 42,000 hours of services in Year 1. 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 Zachary charges customers $82 per hour, the firm can achieve 48,000 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 $92 per hour, the number of service hours will decline to 35,000. Prepare a flexible budget using the new assumption. Variable costs: Fixed costs: ZACHARY COMPUTER SERVICES Pro Forma Income Statement Master Budget < Required A Re Variable costs: Fixed costs: ZACHARY COMPUTER SERVICES Pro Forma Income Statement Flexible Budget < Required A Req Variable costs: Fixed costs: ZACHARY COMPUTER SERVICES Pro Forma Income Statement Flexible Budget < Required B Require