Help Sunt N Cumberland County Senior Services is a non-profit organisation devoted to providing services to whether own homes within the Cumberland County area. The services are provided for senion-homenurung Meals on Wheels and housekeeping in the home nursing program, nurses visit seniors on a regular basis to check on the 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 venue and experies for the past year follow Home Meals House Total Wies AN Revenues 1027, 5267.100 1412, 5.247,201 Variable expenses 57/100 126,200 212.50 10, 401 Contribution margin HAN Fixed expenses Depreciation 69,140 3,240 40.450 27,450 Lability insurance 43,110 20,450 7.30 15, Progran adeinistrators salaries 116,950 10.750 38,50 37.750 General administrative overhede 115,400 33,500 12,4 49.410 Total fixed expenses 24600123 TURN 12 Operating ancoee ess) "Allocated on the basis of program revenues The head administrator of Cumberland County Senior Services Judith liwa, is concerned about the organization's finances and considers the operating income of $5,300 tast year to be rarorthin. 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 feel there should be building staal reserves at a more rapid rate in order to prepare for the next inevitable recession Abor seeing the libove report, was asked for more information about the financial advisability or discontinuing the housekeeping program The depreciation in the housekeeping Category is for a small an that is used to carry the housekeepers and their equipment from to job if the program were discontinued, the van would be donated to charitable organization. Deprecation charges meze salvage value. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the Kability insurance and the salary of the program administrator would be avoided. Required: 1. Compute the change in net operating income for the company as a whole housekeeping progran be continued The India completion 2 Required: 1a. Compute the change in net operating income for the company as a whole housekeeping program be discontinued Brun uten 3 1-6. Should the housekeeping program be discontinued? Yes No 2. Would a segmented income statement format be more useful to management in assessing the long run francia viability of the various services? Yes No