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 $3,000,000 $8,000,000 Variable expenses 1,400,000 3,900,000 Direct fixed expenses 700,000 2,000,000 Allocated common fixed expenses 1,000,000 1,000,000 If the ER department is eliminated, all of the direct fixed expenses would be eliminated as well. If the ER department is eliminated the revenue for the other departments in the hospital would drop 30% since some patients start at ER visits and are admitted to the hospital and treated by other departments. Should Grey-Sloan eliminate or keep the ER department? If Grey-Sloan eliminates the ER department, operating income would by $ Keep because operating income would decrease by $2,130,000 Eliminate because operating income would increase by $4,700,000 Eliminate because operating income would decrease by $3,000,000 Keep because operating income would decrease by $2,130,000 Eliminate because operating income would increase by $4,700,000 Eliminate because operating income would decrease by $3,000,000 Keep because operating income would decrease by $3,300,000