The Shoe Department at the El Paso Department Store Is

Multiple Choice

The Shoe Department at the El Paso Department Store is being considered for closure. The following information relates to shoe activity: $\begin{array}{cr}\text { Sales revenue }&\$350,000\\\text { Variable costs: }\\\text { Cost of goods sold } & 280,000 \\\text { Sales commissions } & 30,000 \\\text { Fixed operating costs } & 90,000\end{array}$ If 70% of the fixed operating costs are avoidable, should the Shoe Department be closed?

A) Yes, El Paso would be better off by $23,000.
B) Yes, El Paso would be better off by $50,000.
C) No, El Paso would be worse off by $13,000.
D) No, El Paso would be worse off by $40,000.
E) None of the answers are correct.