1. 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 $ 925,000 $ 270,000 $ 405,000 $ 250,000 Variable expenses 476,000 119,000 201,000 156,000 Contribution margin 449,000 151,000 204,000 94,000 Fixed expenses: Depreciation 69,000 8,700 40,200 20,100 Liability insurance 43,400 20,400 7,300 15,700 Program administrators salaries 115,100 40,900 38,900 35,300 General administrative overhead* 185,000 54,000 81,000 50,000 Total fixed expenses 412,500 124,000 167,400 121,100 Net operating income (loss) $ 36,500 $ 27,000 $ 36,600 $ (27,100) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $36,500 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.

2. 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?