rocedure: Identify cach cost as either a variable cost or fixed cost. For this example, we will assume that there are no mixed costs. ) Calculate the Contribution Margin %- (Sales Dollars-Variable Costs) Sales Dollars ) Calculate Break-even Point in Sale Dollars BEPS ) Calculate the Margin of Safety What does the Margin of Safety mean to the franchise owner? Fixed Costs CM% 5) What is the total sales needed to earn a pre-tax profit of $250,000? BEP Profit Sales= Fixed Costs + Pre-tax Profit CM% MOS Sales Dollars - BEP Sales 5) What is the total sales needed to earn an after-tax pre-tax profit of $200,000 assuming a 30% tax rate? Pre-tax Profit After Tax Profit/(1-tax rate) BEP-Profit Sales = Weakeness - Opportunities- 7) Come up with a few examples for each category of a SWOT Analysis of a McDonald's franchise? Strengths- Threats- Fixed Costs+ [Pre-tax Profit (1-tax rate)) CM% 8) Prepare a report to be submitted to your Finaincail Institution Loan Officer showing your original budget and flexible budg assuming 1) Sales increase by 10% and a 10% increase in Advertising Costs 2) Sales decrease by 20%- Not sales Food costs Paper costs Gross profit Controllable expenses: Crew payroll Manager payroll Payroll taxes Advertising Promotions Outside services Linen the U.S. Operating supplies Maintenance and repair Utilities Cash over/short Miscellaneous Profit after controllables Noncontrollable expenses: Rent and fees Legal and accounting Insurance Taxes and licenses Miscellaneous income and expenses Depreciation and amortization Interost expense Net nonproduct Total operating income GUTH $2,700,000 -$810,000 -$108,000 $1,782,000 -$540,000 -$108,000 -$54,000 -$108,000 -$13,500 -$27,000 -$5,400 -$27,000 -$40,500 -$81,000 -$2,700 -$13,500 $761,400 -$391,500 -$8,100 -$54,000 $27,000 -$2.700 -$94.500 $27,000 -$2.700 $153.90