Required: a. Using the form below, prepare the pro forma income statement that would appear in the master budget if the company expects to produce 780,000 cans in 20XX. b. A marketing consultant suggests to the Company's president that the product's price may affect the number of cans the company can sell. According to the consultant's analysis, if the firm sets its price at $6.70, it could sell 910,000 cans. Prepare a flexible budget based on the consultant's suggestion. C. The same consultant also suggests that if the company raises its price to $7.70 per can, the volume of sales would decline to 650,000. Prepare a flexible budget based on this suggestion. d. Evaluate the three possible outcomes developed in Requirements a, b, and c, and recommend a pricing strategy. - -.- a. b. C. Standard Master Budget Flexible Budget Flexible Budget Costs per 780,000 Cans 910,000 Cans 650,000 Cans Can Sales revenue $5,616,000: $6,097,000: $5,005,000 - - - - - - -; Variable costs: 5.54: 4,321,200; 5,041,400: 3,601,000 Materials cost 21 -...... - - - - - - - 4 - - - - - - - - - - - - - Labor cost 2: 2: Overhead cost 0: 0: 0: - - - - .- -L - - - - -. S,G, &A cost Contribution margin 1,294,800 1,055,600 1,404,000 Fixed costs 780000 780000; 780000; 780000 -.....- Production 480,000; 480,000; 480,000; 480,000; S,G, &A cost 300,000; 300,000; 300,000; 300,000 Net income $514,800 $275,600 $624,000 d