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HR Management Inc. started a new recruitment service in 2021. The business provided the following financial information relating to the new service for the year

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HR Management Inc. started a new recruitment service in 2021. The business provided the following financial information relating to the new service for the year 2021. The company provided the new service to 150 clients $2,500 per client Professional Service Revenue Fees Fixed Costs Variable Costs $105,000 $800 per client For the year 2022, Management believes that the company will add 30 new clients. Required: (Show all calculations): 1. Prepare an income statement for the new service for year 2021 and compute the degree of operating leverage (DOL). 2. For the year 2022, compute the following: a. The expected percentage increase in net income for year 2022, b. The expected total dollar net income for year 2022 (use the DOL to compute your answer)

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