Question: The Boot Department at the Omaha Department Store is being considered for closure. The following information relates to boot activity: Sales revenue $ 370,000 Variable

The Boot Department at the Omaha Department Store is being considered for closure. The following information relates to boot activity: Sales revenue $ 370,000 Variable costs: Cost of goods sold 293,000 Sales commissions 34,000 Fixed operating costs 92,000

If 90% of the fixed operating costs are avoidable, should the Boot Department be closed?

Multiple Choice

Yes, Omaha would be better off by $39,800.

Yes, Omaha would be better off by $49,000.

No, Omaha would be worse off by $33,800.

No, Omaha would be worse off by $43,000.

None of the answers is correct.

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