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	$ 927,000	$ 269,000	$ 405,000	$ 253,000
Variable expenses	462,000	115,000	195,000	152,000
Contribution margin	465,000	154,000	210,000	101,000
Fixed expenses:
Depreciation	70,500	8,900	40,900	20,700
Liability insurance	44,000	20,900	7,700	15,400
Program administrators salaries	115,900	40,100	38,800	37,000
General administrative overhead*	185,400	53,800	81,000	50,600
Total fixed expenses	415,800	123,700	168,400	123,700
Net operating income (loss)	$ 49,200	$ 30,300	$ 41,600	$ (22,700)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $49,200 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?