Company has been operating two profitable restaurants in Vancouver and Toronto for several years. A year ago, Company expanded its business to Montreal, and the Montreal restaurant has been suffering loss since its opening. The annual income statement for last year for the three restaurants is as follows: Rcvenue Cost of Food Rent (ronewal yearly) Utilities Labour costs (paid hourly) Allocated corporate overhead Total Costs Operating Income (loss) Vancouver Toronto Montreal $1,197,000 $1,610,000 $793,000 $480,000 $723,000 $356,000 133,000 178,000 139,000 72,000 90,000 84,000 200,000 384,000 185,000 159,000 159,000 159,000 $1,044,000 $1,534,000 $923,000 $ $153,000 $276,000 $(130,000) Total $3,800,000 $1,559,000 450,000 246,000 769,000 477,000 $3,500,000 $299,000 A big portion of the corporate overhead is related to marketing and advertisement. The total overhead costs doubled when French was added to the marketing and advertisement. The corporate overhead costs were evenly allocated to three locations, when the Montreal restaurant was newly added a year ago Mr. Yamamoto, the owner of Company, is considering his options. The first option is to close down the Montreal restaurant. The second option is to keep the Montreal restaurant and open another restaurant of similar size to the operation of the Montreal restaurant in a French language region, such as Moncton, New Brunswick. Your answer is partially correct. Try again. Analyze option 1: Closing the Montreal restaurant independently. By closing down the Montrcal restaurant, the total corporate overhead will be reduced by half to the previous level. Should Company dosc thc restaurant in Montreal? Net Benefit of closing the Montreal restaurant Net Benet Company should close the Montreal restaurant. Your answer is partially correct. Try again. Analyze option 2: Opening the Moncton restaurant independently. By adding a new restaurant in Moncton, the financial information is similar to the Montreal restaurant, except the cost of food will be $293,520, due to the volume discount and the rent in Moncton will be $97,120 annually. Company does not expect to Incur additional corporate overhead and the total corporate overhead costs will be evenly allocated to four restaurants. Should Company open a restaurant in Moncton? - Net benefit of opening the Moncton restaurant Companyshould open the Moncton restaurant