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	$ 916,000	$ 264,000	$ 401,000	$ 251,000
Variable expenses	463,000	110,000	199,000	154,000
Contribution margin	453,000	154,000	202,000	97,000
Fixed expenses:
Depreciation	69,800	8,300	40,800	20,700
Liability insurance	42,600	20,200	7,200	15,200
Program administrators salaries	114,300	40,100	38,900	35,300
General administrative overhead*	183,200	52,800	80,200	50,200
Total fixed expenses	409,900	121,400	167,100	121,400
Net operating income (loss)	$ 43,100	$ 32,600	$ 34,900	$ (24,400)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $43,100 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. What is the financial advantage or (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
Traceable fixed expenses:
Depreciation
Liability insurance
Program administrators salaries
Total traceable fixed expenses
Program segment margins
General administrative overhead
Net operating income (loss)