13 Problem 13-19 (Algo) Dropping or Retaining a Segment [LO13-2] 3 points Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors-home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: eBook Home Meals On House- Total Nursing Wheels keeping $ 930,000 $264,000 $ 406,000 $ 260,000 467,000 111,000 205,000 151,000 463,000 153,000 201,000 109,000 Print Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (loss) 69,900 8,300 40,900 20,700 43,600 20,800 7,500 15,300 115,500 40,600 38,500 36,400 186,000 52,800 81,200 52,000 415,000 122,500 168, 100 124,400 $ 48,000 $30,500 $ 32,900 $(15,400) References *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $48,000 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping program. The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided, Required: 1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? 1-b. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? 2-a. Prepare a properly formatted segmented income statement 2-b. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A Req 2B Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? OYes ONo Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2A Req 2B Prepare a properly formatted segmented income statement. Total Home Nursing Meals On Wheels House- keeping 0 0 0 0 Revenues Variable expenses Contribution margin Traceable fixed expenses: Depreciation Liability insurance Program administrators' salaries Total traceable fixed expenses Program segment margins General administrative overhead Net operating income (loss) 0 0 0 0 0 0 $ 0 $ 0 0 Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Reg 1A Reg 1B Req 2A Reg 2B Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Yes No