Frankie's Snow Plow Business

Based on heavy snowfall in Atlantic Canada this year, Frankie is considering setting up a plowing service for residents of Antigonish town and county. Frankie has gathered some information about what would be required to start the business but needs help in deciding what to do$.$

Frankie has found a pickup truck he thinks he can buy from his Uncle George for $$8,500.$ He would need to fit the truck with a plow blade, and has found one for sale for $$2,200.$ Frankie$$s friend Steve is a mechanic and can attach the blade to the truck in about two hours. Steve$$s per hour labour rate is $$65.$

Frankie thinks he can charge customers $$45$ per driveway, and figures six driveways can be plowed in an hour. He would hire someone to drive the truck, and would pay the driver $$15$ per hour. He further estimates that it would cost $$112\mathrm{.}50$ to fill the truck with gas, which would provide enough fuel to plow $15$ driveways.

Frankie wants to promote his new business and has determined that for $$2,600,$ he can have flyers distributed in mailboxes throughout Antigonish. Additionally, a local company can put a company logo and contact details on the truck for $$875.$Based on the assumption that Frankie plows $475$ driveways, create a pro forma income statement including the five major line items. Should Frankie expect to achieve a Return on Sales of $10\%?$

Based on the numbers above, if $475$ units were sold, profits would be:

Do not include commas in your answers

Revenue: $ Answer $1$ Question $2$

Less: COGS $ Answer $2$ Question $2$

$=$ Gross Profit $ Answer $3$ Question $2$

Less: Operating Costs $ Answer $4$ Question $2$

$=$ Profit $($Loss$)$: $ Answer $5$ Question $2$

What is the Return on Sales? $=$ Answer $6$ Question $2$

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