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3 points Problem 12-14A Simple Rate of Return: Payback [L03, L04] Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc.,

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3 points Problem 12-14A Simple Rate of Return: Payback [L03, L04] Paul Swanson has an opportunity to acquire a franchise from The Yogurt Place, Inc., to dispense frozen yogurt products under The Yogurt Place name. Mr. Swanson has assembled the following information relating to the franchise: E\" A suitable location in a large shopping mall can be rented for $3,600 per month. 13- Remodeling and necessary equipment would cost $196,200. The equipment would have a 11year life and an $18,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. C. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $306,000 per year. Ingredients would cost 19.9% of sales. 11- Operating costs would include $68,100 per year for salaries, $4,100 per year for insurance, and $25,700 per year for utilities. In addition, Mr. Swanson would have to pay a conunission to The Yogurt Place, Inc., of 11% of sales. (Ignore income taxes.) Requirement 1: Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet. (Input all amounts as positive value. Omit the "$" sign in your response.) m 9 $306,000 0 Variable expenses: Cost of inggdients o $ 0 Commissions o 0 94,554 0 Contribution mgggjn 0 211,440 0 Selling and administrative expenses

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