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	$ 931,000	$ 267,000	$ 409,000	$ 255,000
Variable expenses	467,000	112,000	197,000	158,000
Contribution margin	464,000	155,000	212,000	97,000
Fixed expenses:
Depreciation	69,800	8,600	41,000	20,200
Liability insurance	44,500	20,800	7,800	15,900
Program administrators salaries	115,700	40,700	38,400	36,600
General administrative overhead*	186,200	53,400	81,800	51,000
Total fixed expenses	416,200	123,500	169,000	123,700
Net operating income (loss)	$ 47,800	$ 31,500	$ 43,000	$ (26,700)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $47,800 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 Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 2A Req 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 Req 1A Reg 1B Reg 2A Reg 2B Prepare a properly formatted segmented income statement. Total Home Nursing Meals On Wheels House- keeping 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) Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Req 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? Yes ONO