## Contribution Format Income Statement Analysis### Objective:Prepare a contribution format income statement that displays the expected net operating income each year from the franchise outlet.### The Yogurt Place, Inc.**Contribution Format Income Statement:**- **Variable Expenses:** - Detailed itemization required- **Fixed Expenses:** - Detailed itemization required### Instructions:1. **Compute the Simple Rate of Return:** - Calculate and round your answer to one decimal place. - Input your answer in the provided box for the "Simple rate of return."2. **Decision Making:** - If Mr. Swanson requires a simple rate of return of at least 15%, decide whether he should acquire the franchise by selecting "Yes" or "No."3. **Compute the Payback Period:** - Calculate and round your answer to one decimal place. - Input your answer in the provided box for the "Payback period."4. **Decision Making:** - If Mr. Swanson wants a payback of three years or less, decide whether he will acquire the franchise by selecting "Yes" or "No."### Notes:- Ensure all computations are accurate and align with required financial metrics.- This analysis assists in making informed business decisions based on financial projections and investment criteria. 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 $2,800 per month.b. Remodeling and necessary equipment would cost $276,000. The equipment would have a 20-year life and a $13,800 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 $310,000 per year. Ingredients would cost 20% of sales.d. Operating costs would include $71,000 per year for salaries, $3,600 per year for insurance, and $28,000 per year for utilities. In addition, Mr. Swanson would have to pay a commission to The Yogurt Place, Inc., of 13.0% of sales.

Income statement is a financial statement that displays a company's revenue and costs. It also shows…

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FINANCIAL ACCOUNTING

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Author:Libby

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Chapter1: Financial Statements And Business Decisions

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Net sales for the year were $1,100,000 and cost of goods sold was $781,000 for the company's existing products. A new product is presently under development and will have an expected selling price of not more than $69 per in order to remain competitive with similar products in the marketplace. unit • Calculate gross profit and the gross profit ratio for the year.
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses Ь Operating income Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) million $34,900 $(12,194) (8,800) (7,756) (5,100) $(33,850) $1,050 What
A merchandising company has provided the following contribution format incomestatement:Sales (10,000 units) $ 700,000Variable expenses 350,000Contribution margin 350,000Fixed expenses 85,000Net operating income $ 265,000(a) What is the total contribution margin? (b) What is the unit contribution margin? Show your calculations. **Pls help me in clear soultion with accurate answer pls thanks
Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 83,800 units during the year. Cover-to-CoverCompany Biblio FilesCompany Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) Review the definitions of contribution margin ratio and unit contribution margin. Also review the formulas for break-even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover CompanyContribution Margin Income StatementFor the Year Ended December 31, 20Y8 Sales $419,000 Variable costs: Manufacturing expense $251,400 Selling expense 20,950 Administrative expense 62,850 (335,200) Contribution margin $83,800 Fixed costs: Manufacturing…
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Contribution margin and contribution margin ratio For a recent year, McDonald’s (MCD) company-owned restaurants had the following sales and expenses (in millions): Line Item Description Amount Sales $21,000 Food and paper $(2,500) Payroll and employee benefits (2,200) Occupancy and other expenses (4,100) General, selling, and administrative expenses (4,200) Total $(13,000) Operating income $8,000 Assume that the variable costs consist of food and paper, payroll, 25% of occupancy and other expenses, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin?fill in the blank 1 of 1$ million b. What is McDonald's contribution margin ratio? Round to one decimal place.fill in the blank 1 of 1 % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest tenth of a million…
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Assume the following financial data pertains to a certain single-product lodging business:Room Sales - $400,000Total Variable - $260,000Costs Contribution Margin - $140,000Total Fixed Costs - $ 76,000IBIT - $ 64,000Based on the financial data provided, the contribution margin percentage is __________ percent.
Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) $15,800 $(4,402) (4,000) (4,628) General, selling, and administrative expenses (2,300) $(15,330) $470 Operating income Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) million b. What is McDonald's contribution margin ratio? % c. How much would operating income increase if same-store sales increased by $900 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. million
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Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales Food and packaging Payroll Occupancy (rent, depreciation, etc.) General, selling, and administrative expenses $15,295.0 $(4,896.9) (4,134.2) (3,667.7) (2,384.5) $(15,083.3) $211.7 Operating income Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative exp a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). $5,776.6 X million b. What is McDonald's contribution margin ratio? Round to one decimal place. 37.77 X % I. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no ch= margin ratio or fixed costs? Round your answer to the nearest tenth of a million (one decimal place). 277.6 million Feedback

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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 Wariable expenses: Fixed expenses: