ABC Tech Solutions provides IT infrastructure services. Financial data for 2023 is detailed below:

Ledgers:

• Service Revenue: $40,000,000
• Salaries and Benefits: $20,000,000
• Rent Expense: $1,500,000
• Depreciation Expense: $1,000,000
• Marketing Expenses: $3,000,000

Requirements:

• Prepare ABC Tech Solutions' income statement for the year ended December 31, 2023.
• Calculate the Contribution Margin and Operating Income.
• Determine the Net Income after taxes using a tax rate of 30%.
• Analyze the impact of fixed costs on ABC Tech Solutions' profitability.
• Discuss the role of cost-volume-profit analysis in making strategic decisions at ABC Tech Solutions.