You have the following quarterly income statements of a restaurant operation:

	1st Qtr.	2nd Qtr.	3rd Qtr.	4th Qtr.
Sales revenue	86,400	97,000	89,400	46,400
Cost of sales	32,800	35,900	33,100	18,100
Gross margin	53,600	61,100	56,300	28,300
Operating Expenses
Wages & salaries	32,000	35,900	33,100	17,800
Supplies	1,900	2,200	1,970	1,100
Advertising	900	900	900	600
Utilities	2,600	2,900	2,680	2,400
Maintenance	450	450	400	400
Insurance	1,200	1,200	1,200	1,200
Interest	750	750	750	750
Depreciation	700	700	700	700
Rent	6,000	6,000	6,000	6,000
Total operating expenses	46,500	51,000	47,700	30,950
Operating Income	7,100	10,100	8,600	-2,650

The owner is contemplating closing the restaurant in the fourth quarter in order to eliminate the loss and take a three-month vacation. The owner has asked for your help. Before giving your decisions, you analyze the expenses if the restaurant is closed for the 4th quarter.

Wages and salaries: $3,000 is a fixed cost of key personnel who would be kept on the payroll even if the operation were closed.

Supplies expense: A variable cost based on sales revenue

Advertising: Half of the 4th quarter expense is fixed; the other half is variable.

Utilities: Still need to pay $100 per month when the restaurant is closed.

Maintenance: The cost is $200 for the 4th quarter if the restaurant is closed.

Q1. Complete the following 4th quarter income statement based on the

that the restaurant will be closed.

(Hint: Adjust the accounts in the following table based on the information listed above.)

4th Qtr. Income Statement
	Open	Closed
Sales revenue	46,400
Cost of sales	18,100
Gross profit	28,300
Operating Expenses
Wages & salaries	17,800
Supplies	1,100
Advertising	600
Utilities	2,400
Maintenance	400
Insurance	1,200
Interest	750
Depreciation	700
Rent	6,000
Total operating expenses	30,950
Operating Income	-2,650

Q2. What is the operating income for the whole year if the restaurant is closed in the 4th quarter?

Q3. What is the operating income for the whole year if the restaurant remains open in in the 4th quarter? Should the restaurant be closed or open in the 4th quarter?