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	$	930,000	$	268,000	$	404,000	$	258,000
Variable expenses		464,000		111,000		203,000		150,000
Contribution margin		466,000		157,000		201,000		108,000
Fixed expenses:
Depreciation		69,600		8,200		40,700		20,700
Liability insurance		43,700		20,100		8,000		15,600
Program administrators salaries		115,500		40,800		38,900		35,800
General administrative overhead*		186,000		53,600		80,800		51,600
Total fixed expenses		414,800		122,700		168,400		123,700
Net operating income (loss)	$	51,200	$	34,300	$	32,600	$	(15,700)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $37,600 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.

1-a. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program

1-b. Based on the financial advantage (disadvantage) of discontinuing the house keeping program calculated in requirement Req 1A, should the house keeping 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?