K&B is a small management consulting firm. Last month, the firm billed fewer hours than expected, and, as expected, profits were lower than anticipated.

	Reported Income Statement				Master Budget
Billable hoursa			7,200			9,000
Revenue		$	670,000		$	810,000
Professional salaries (all variable)			340,000			400,000
Other variable costs (e.g., supplies, computer services)			98,000			120,000
Fixed costs			205,000			200,000
Profit		$	27,000		$	90,000

^aThese are hours billed to clients. They are fewer than the number of hours worked because there is nonbillable time (e.g., slack periods, time in training sessions) and because some time worked for clients is not charged to them.

Required:

Prepare a flexible budget for K&B. Use billable hours as the measure of output (that is, units produced). (Do not round intermediate calculations.)