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	$ 926,000	$ 269,000	$ 400,000	$ 257,000
Variable expenses	462,000	118,000	193,000	151,000
Contribution margin	464,000	151,000	207,000	106,000
Fixed expenses:
Depreciation	69,300	8,200	40,800	20,300
Liability insurance	43,900	20,800	7,600	15,500
Program administrators salaries	114,000	40,500	38,100	35,400
General administrative overhead*	185,200	53,800	80,000	51,400
Total fixed expenses	412,400	123,300	166,500	122,600
Net operating income (loss)	$ 51,600	$ 27,700	$ 40,500	$ (16,600)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $51,600 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. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program?

2. Prepare a properly formatted segmented income statement

	Total	Home Nursing	Meals On Wheels	House-keeping
Revenues
Variable expenses
Contribution margin	0	0	0	0
Traceable fixed expenses:
Depreciation
Liability insurance
Program administrators salaries
Total traceable fixed expenses	0	0	0	0
Program segment margins	0	$0	$0	$0
General administrative overhead
Net operating income (loss)	0