Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who...
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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 seniors-home nursing. Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) *Allocated on the basis of program revenues. Total $ 923,000 464,000 459,000 Home Nursing $ 268,000 114,000 154,000 Meals On Wheels $ 403,000 190,000 House-keeping $ 252,000 160,000 213,000 92,000 68,900 8,200 40,200 20,500 43,800 20,700 7,900 15,200 115,700 40,700 39,000 36,000 184,600 53,600 80,600 50,400 413,000 123,200 167,700 122,100 $ 46,000 $ 30,800 $ 45,300 $ (30,100) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $46,000 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Req 1A Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? OYes ONO < Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Prepare a properly formatted segmented income statement. 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) Meals On House- Total Home Nursing Wheels keeping < Req 1B Req 2B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? OYes ONO < Req 2A Req 2B > 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 seniors-home nursing. Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) *Allocated on the basis of program revenues. Total $ 923,000 464,000 459,000 Home Nursing $ 268,000 114,000 154,000 Meals On Wheels $ 403,000 190,000 House-keeping $ 252,000 160,000 213,000 92,000 68,900 8,200 40,200 20,500 43,800 20,700 7,900 15,200 115,700 40,700 39,000 36,000 184,600 53,600 80,600 50,400 413,000 123,200 167,700 122,100 $ 46,000 $ 30,800 $ 45,300 $ (30,100) The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $46,000 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Req 1A Req 1B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? OYes ONO < Req 1A Req 2A > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Prepare a properly formatted segmented income statement. 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) Meals On House- Total Home Nursing Wheels keeping < Req 1B Req 2B > Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 28 Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? OYes ONO < Req 2A Req 2B >
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