II. 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 seniorshome nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow:

		Total		Home Nursing		Meals On Wheels		House- keeping
Revenues	$	920,000	$	265,000	$	403,000	$	252,000
Variable expenses		470,000		119,000		193,000		158,000
Contribution margin		450,000		146,000		210,000		94,000
Fixed expenses:
Depreciation		70,000		8,800		40,600		20,600
Liability insurance		43,300		20,600		7,100		15,600
Program administrators salaries		115,300		40,700		38,400		36,200
General administrative overhead*		184,000		53,000		80,600		50,400
Total fixed expenses		412,600		123,100		166,700		122,800
Net operating income (loss)	$	37,400	$	22,900	$	43,300	$	(28,800)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $37,400 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. 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. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Complete this question by entering your answers in the tabs below. Should the Housekeeping program be discontinued? Complete this question by entering your answers in the tabs below. Prepare a properly formatted segmented income statement. Complete this question by entering your answers in the tabs below. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services