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 a. A suitable location in a large shopping mall can be rented for $4,200 per month b. Remodeling and necessary equipment would cost $360,000. The equipment would have a 15-year life and an $24,000 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation Ingredients would cost 20% of sales per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place c. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $450,000 per year. d. Operating costs would include $85,000 per year for salaries, $5,000 per year for insurance, and $42,000 Inc., of 15.0% 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 Variable expenses Selling and administrative expenses