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Grey-Sloan Memorial Hospital is considering eliminating the Emergency Department Financial data for the past year is summarized below ER Department All Other Departments total Revenue

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Grey-Sloan Memorial Hospital is considering eliminating the Emergency Department Financial data for the past year is summarized below ER Department All Other Departments total Revenue $15,000,000 $98,000,000 Variable expenses 13,600,000 64,500,000 Direct fixed expenses 4,000,000 18,000,000 Allocated common fixed expenses 2.000.000 2.000.000 Scenario 1: If the ER depar. Tent is eliminated, all of the direct fixed expenses would be eliminated as weit. If the ER department is eliminated the revenue for the other departments in the hospital would drop 15% since some patients start at ER visits and are admitted to the hospital and treated by other departments. If Grey-Sloan eliminates the ER department, operating income would by $ Scenario 2: S1,000,000 of the ER's direct fixed expenses consists of ER equipment that is dedicated to that area and it cannot be sold if the ER department is eliminated. If the ER department is eliminated the revenue for the other departments in the hospital would drop 5% since some patients start at ER visits and are admitted to the hospital and treated by other departments If Grey-Sloan eliminates the ER department, by $ operating income would A

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