Required: 

a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 38,000 hours of service in 2019.

b. A marketing consultant suggests to Mr. Cooper that the service rate may affect the number of service hours that the firm can achieve. According to the consultant's analysis, t Jordan charges customers $75 per hour, the firm can achieve 46,000 hours of services. Prepare a flexible budget using the consultant's assumption.

c. The same consultant also suggests that if the firm raises its rate to s87 per hour, the number of service hours will decline to 34,000. Prepare a flexible budget using the new assumption

Transcribed Image Text:

Howard Cooper, the president of Jordan 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 2019. Standard rate and variable costs Service rate per hour $ 80.00 33.00 6.60 Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 4.20 $516,e00 147,000 Howard Cooper, the president of Jordan 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 2019. Standard rate and variable costs Service rate per hour $ 80.00 33.00 6.60 Labor cost Overhead cost Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 4.20 $516,e00 147,000

Answer rating: 100% (QA)

JORDON COMPUTER SERVICES Pro Forma Income Statement Master Budget Hours Per Hour Total Sales Service ... View the full answer