Jackson County Senior Services is a nonprofit organization devoted to oviding essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for fors-home nursing, Meals on Wheels, and housekeeping. Data on revenue and expenses for the past year follow. Home Meals on House- Total Nursing Wheels keeping $924,000 $261,000 $403,000 $ 260,000 470,000 115,000 202.000 153,000 454,000 146,000 201.000 102,000 Revenues Variable expenses Contribution margin Fixed expenses Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (los) 69,700 8,400 40,400 20,900 44,000 20,900 7.100 16.000 114,500 40,000 38,500 36,000 184,800 $2,200 80.600 52.000 413,000 121,500 166.600 124.900 $41,000 $ 24,500 $ 34,400 $(17,900) "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 $41,000 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. Should the Housekeeping program be discontinued? 2-a. Prepare a properly formatted segmented income statement 2b Would a segmented income statement format be more useful 30 management in assessing the long-run financial viability of the various services? Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2A Reg 28 What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Total fixed expenses Net operating income (loss) 413,000 $ 41,000 121,500 166,600 124,900 4,500 $ 34,400 $(17,900) "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 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 program were discontinued, the van would be donated to a charitable organization. None of the general administrative o would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program ar 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 viat various services? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 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 Olo 0 $ 0 $ 0 $ 0 0
