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year is summarized below ER Department All Other Departments total $24,000,000 $74,000,000 48,000,000 Revenue Variable expenses Direct fixed expenses Allocated common fixed expenses 19,200,000 7,000,000
year is summarized below ER Department All Other Departments total $24,000,000 $74,000,000 48,000,000 Revenue Variable expenses Direct fixed expenses Allocated common fixed expenses 19,200,000 7,000,000 2,000,000 12,500,000 2,000,000 by $ Scenario 1: 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 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 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, operating income would by $
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