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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

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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 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 $ 932,000 $ 268,000 $ 410,000 $ 254,000
Variable expenses 468,000118,000190,000160,000
Contribution margin 464,000150,000220,00094,000
Fixed expenses:
Depreciation 69,1008,30040,50020,300
Liability insurance 43,40020,8007,30015,300
Program administrators salaries 114,90040,90038,60035,400
General administrative overhead*186,40053,60082,00050,800
Total fixed expenses 413,800123,600168,400121,800
Net operating income (loss) $ 50,200 $ 26,400 $ 51,600 $ (27,800)
*Allocated on the basis of program revenues.
The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $50,200 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?Problem 11-19(Algo) Dropping or Retaining a Segment [LO11-2]
Jackson County Senlor 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
hursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow:
Allocated on the basis of program revenues.
The head administrator of Jackson County Senlor Services, Judith Miyama, considers last year's net
pperating income of $50,200 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.
Requlred:
1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program?
l-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
inancial vlability of the varlous services?
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