Legal Solvers Ltd., an international law firm, is looking to bid on a contract from its head quarter on performing legal services for three important clients in three different counties. If the contract is given to Legal Solvers Ltd, since all current staff fully work on other projects, the firm must recruit one new employee at a salary of $59,000 to handle the additional work required. If the firm is awarded the contract, the firm's partners expect to obtain additional new clients from the respective counties with high level of certainty. Excluding the three counties, expected new work is 820 hours at an average billing rate of $90 per hour. Legal Solvers' annual costs and revenue information are shown below: Firm volume in hours (normal) Fixed costs Variable cost 30,750 $575,000 $ 35/hr In case of winning the contract, the legal services performed for the three counties will require 880 hours of expected work by the firm. Required: 1. If the firm's partners expectations are true in regards to additional clients obtained from the contract, what is the lowest bid the firm can submit and still expect to increase annual net income? What would be the hourly billing rate for the county legal service jobs just to break even on all the new business? (Round "Average billing rate" answer to 2 decimal places.) 2. If the contract is obtained at a price of $44,700, what is the minimum number of hours of new business in addition to the county work that must be obtained for the firm to break even on total new business? What is the margin of safety (MOS) regarding the county legal service job proposal? per hour 1. Lowest revenue Average billing rate 2. Minimum number of hours Margin of safety (MOS) hours a) In your own words, describe how you would incorporate income tax into the calculation of required sales to achieve a certain after-tax profit. b) Legal Solvers Ltd. is considering running a what-if analysis on their break-even calculations. In your own words, explain how changes in the below variables will impact break-even in billing hours: i. increase in variable cost ii. decrease in fixed cost iii. increase in average billing rate per hour iv. increase in fixed cost