Cumberland County Senior Services is a non-profit organization devoted to providing essential services to seniors who live in their own homes within the Cumberland County area. Three services are provided for seniors home nursing. Meals on Wheels, and housekeeping in the home nursing program, nurses visit Seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals on Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services Data on revenue and expenses for the past year follow Revenues Variable expenses Total 3909,000 495.700 Home Murs $262.600 121,400 14.20 Meals on Miel $100,000 213,500 House keeping 5242,400 161,800 113,30 191,500 10.600 Contribution martin Fixed expenses Depreciation Liability Insurance Program administrators solaries General administrative overhead 68,30 42,370 115.650 181.000 8.000 20.150 40,250 52,520 40,150 2,100 38,150 39,90 20,150 15,120 37.250 48,480 Total fixed expenses 400,200 121,000 161,200 121.000 55,100 $ 20,200 $25,500 5(40.480) Operating incon (loss "Allocated on the basis of program revenues The head administrator of Cumberland County Senior Services Judith Ewa is concerned about the organization's finances and considers the operating income of $5100 last year to be razor-thin (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future ) She feels that the organization should be building its final eccata more carte internate for the invita rescin After coin the art of "Allocated on the basis of program revenues The head administrator of Cumberland County Senior Services, Judith Ewa, is concerned about the organizations finances and considers the operating income of $5,100 last year to be razor-thin (Last year's results were very similar to the results for previous years and are representative of what would be expected in the future) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession After seeing the above report Ews asked for more information about the financial advisability of discontinuing the housekeeping program The depreciation in the housekeeping category 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. Depreciation charges assume zero salvage value. 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-o. Compute the change in net operating income for the company as a whole it housekeeping program be discontinued in net operating income by 1-b. Should the housekeeping program be discontinued? Yes O No 2. Would a segmented income statement format be more useful to management in assessing the long run financial platility of the various services? Yes