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Kelso runs a bath bomb business as a franchisee of a company called The Bomb Bath Bombs (TBBB). Franchisees must pay a royalty to TBBB
Kelso runs a bath bomb business as a franchisee of a company called The Bomb Bath Bombs ("TBBB"). Franchisees must pay a royalty to TBBB based on sales. The franchisee has a choice of paying a fixed royalty of $250 per month (Plan A), or a variable royalty of $5 per bath bomb (Plan B). Currently, Kelso sells 50 bath bombs per month. The bath bombs are sold for $12 each, with the cost of each bath borhb being $3. Complete the following income statement for Kelso's current situation, assuming she uses Plan A. Do not use decimals, commas, or dollar signs. Expenses should be shown as a negative number by using a dash ("-"). Kelso's Bombs- currently (plan A) Sales Cost of sales Gross profit ** (no need to complete) Royalties Net income ### (no need to complete) Kelso is contemplating a change to plan B, which is a variable royalty for each bath bomb sold. Assuming she is anticipating a pandemic-related sales decrease to 30 bath bombs per month, complete the following income statement for Kelso assuming the sales decrease occurs and she uses plan B. Do not use decimals, commas, or dollar signs. Expenses should be shown as a negative number by using a dash ("-"). Kelso's Bombs - sales decrease (plan B) Sales
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