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	$ 267,000	$ 402,000	$ 257,000
Variable expenses	472,000	112,000	209,000	151,000
Contribution margin	454,000	155,000	193,000	106,000
Fixed expenses:
Depreciation	69,300	8,500	40,200	20,600
Liability insurance	43,600	20,400	7,200	16,000
Program administrators salaries	113,700	40,100	38,500	35,100
General administrative overhead*	185,200	53,400	80,400	51,400
Total fixed expenses	411,800	122,400	166,300	123,100
Net operating income (loss)	$ 42,200	$ 32,600	$ 26,700	$ (17,100)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $42,200 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?