Homework Help is Here – Start Your Trial Now!
Business
Accounting
quired A Required B Required C pare the pro forma income statement that would app ervices in Year 3. JORDAN COMPUTER SERVICES Pro Forma Income Statement Master Budget

quired A Required B Required C pare the pro forma income statement that would app ervices in Year 3. JORDAN COMPUTER SERVICES Pro Forma Income Statement Master Budget

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 31,000 hours of services in Year 3. JORDAN COMPUTER SERVICES Pro Forma Income Statement Master Budget Services revenue Variable costs: Labor cost Overhead cost Selling, general, and administrative costs $ Fixed costs: < Required A Required B >
Transcribed Image Text:Complete this question by entering your answers in the tabs below. Required A Required B Required C Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 31,000 hours of services in Year 3. JORDAN COMPUTER SERVICES Pro Forma Income Statement Master Budget Services revenue Variable costs: Labor cost Overhead cost Selling, general, and administrative costs $ Fixed costs: < Required A Required B >
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 3. Standard rate and variable costs Service rate per hour $ 84.00 Labor cost 33.00 Overhead cost 6.60 Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 3.50 $517,000 145,000 Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 31,000 hours of services in Year 3. 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, if Jordan charges customers $79 per hour, the firm can achieve 39,000 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 $89 per hour, the number of service hours will decline to 27,000. 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 3. Standard rate and variable costs Service rate per hour $ 84.00 Labor cost 33.00 Overhead cost 6.60 Selling, general, and administrative cost Expected fixed costs Facility maintenance Selling, general, and administrative 3.50 $517,000 145,000 Required: a. Prepare the pro forma income statement that would appear in the master budget if the firm expects to provide 31,000 hours of services in Year 3. 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, if Jordan charges customers $79 per hour, the firm can achieve 39,000 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 $89 per hour, the number of service hours will decline to 27,000. Prepare a flexible budget using the new assumption.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Income Statement Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS