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: b. Remodeling and necessary equipment would cost $294,000. The equipment would have a 20-year life and an $14,700 salvage value. Straight -ine depreciation considered in computing depreciation c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $340,000 per year d. Operating costs would include $74,000 per year for salaries, $3,900 per year for insurance, and $31,000 Ingredients would cost 20% of sales year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place Inc., of 14.5% of sales. Required 1. Prepare a contribution format income statement that shows the expected net operating income each year from the franchise outlet PAUL SWANSON Contribution Format Income Statement S 340,000 Sales Variable expenses Cost of ingredients S68,000 68,000 Commissions Contribution margin Selling and administrative expenses 272,000 Salaries Insurance Utilities Rent S 74,000 3.900 31,000 Type here to search