Can you explain this to me in detail? Problem : You are a very savvy college...

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Finance

Can you explain this to me in detail?
Problem : You are a very savvy college student and start yourown food stand from a catering truck. You understand the thoughtprocess of your peers and decide to do business when it would bemost profitable, from 10:00pm to 3:00am. Considering vacations andfinals, you only operate the catering truck 320 days per year. Thetruck is leased by you for $1000/month with a continuous 12 monthlease. Additional expenses for insurance, maintenance, etc come outto $2000 per year. You also have 2 employees that work for $10/hr.However since they are very good employees, they alternate days andonly one employee covers each shift. Also, you sell your productswith a gross margin of 80% on every item.
1. Create a plausible income statement for 1 year of businesssuch that you have a before tax income of $75,000.00. Do notconsider income taxes for this homework assignment.
2. What were your total sales for the year?
3. Is this plausible in the amount of time that you areopen?

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Answer Total annual lease expenses 1000 per month12 months 12000 Annual expenses for insurance maintenance etc 2000 Employee expenses 320 days per year 5 hours per day 10 per hour 16000 Note that each employee will work for only 32025 See Answer

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Can you explain this to me in detail?Problem : You are a very savvy college student and start yourown food stand from a catering truck. You understand the thoughtprocess of your peers and decide to do business when it would bemost profitable, from 10:00pm to 3:00am. Considering vacations andfinals, you only operate the catering truck 320 days per year. Thetruck is leased by you for $1000/month with a continuous 12 monthlease. Additional expenses for insurance, maintenance, etc come outto $2000 per year. You also have 2 employees that work for $10/hr.However since they are very good employees, they alternate days andonly one employee covers each shift. Also, you sell your productswith a gross margin of 80% on every item.1. Create a plausible income statement for 1 year of businesssuch that you have a before tax income of $75,000.00. Do notconsider income taxes for this homework assignment.2. What were your total sales for the year?3. Is this plausible in the amount of time that you areopen?