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 $4,800 per month.
b.	Remodeling and necessary equipment would cost $396,000. The equipment would have a 10-year life and an $39,600 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation.
c.	Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $510,000 per year. Ingredients would cost 20% of sales.
d.	Operating costs would include $91,000 per year for salaries, $5,600 per year for insurance, and $48,000 per 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 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 $4,800 per month. b. Remodeling and necessary equipment would cost S396,000. The equipment would have a 10-year life and an S39,600 salvage value. Straight-line depreciation would be used, and the salvage value would be considered in computing depreciation. Based on similar outlets elsewhere, Mr. Swanson estimates that sales would total $510,000 per year. Ingredients would cost 20% of sales. c. d. Operating costs would include S91,000 per year for salaries, $5,600 per year for insurance, and $48,000 per 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. The Yogurt Place, Inc. Contribution Format Income Statement Variable expenses: dt Fixed expenses: This is a numeric cell, so please enter numbers only. dt