a.
Calculate the
b.
Calculate the residual income for both the Location C and Location I for (1) last year’s results, (2) the toasted sub addition to the menu, and (3) assuming similar operating profit results next year but adding in the proposed menu change.
c.
Explain whether the managers would choose to expand the menu to include the toasted subs, assuming that the two shops are owned by Person BB and explain the reasons if the two shops were independently franchised units with independent owners
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