Please see my attached accounting questions- thank you for your...

Please see my attached accounting questions- thank you for your help

Chapter 15
1.
Curtis Salter, the president of Kasimer 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 2015.
Standard rate and variable costs
Service rate per hour $ 75.00
Labor cost 40.00
Overhead cost 7.20
Selling, general, and administrative cost 4.30
Expected fixed costs
Facility maintenance $400,000
Selling, general, and administrative 150,000
a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to
provide 30,000 hours of services in 2015.
b.
A marketing consultant suggests to Mr. Salter that the service rate may affect the number of service
hours that the firm can achieve. According to the consultant’s analysis, if Kasimer charges customers
$70 per hour, the firm can achieve 38,000 hours of services. Prepare a flexible budget using the
consultant’s assumption.