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	$ 928,000	$ 268,000	$ 402,000	$ 258,000
Variable expenses	470,000	114,000	205,000	151,000
Contribution margin	458,000	154,000	197,000	107,000
Fixed expenses:
Depreciation	70,200	9,000	40,500	20,700
Liability insurance	43,000	20,400	7,400	15,200
Program administrators salaries	115,200	40,800	39,000	35,400
General administrative overhead*Footnote asterisk	185,600	53,600	80,400	51,600
Total fixed expenses	414,000	123,800	167,300	122,900
Net operating income (loss)	$ 44,000	$ 30,200	$ 29,700	$ (15,900)

^{*Footnote asterisk}Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $44,000 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. 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?