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	$	265,000	$	404,000	$	257,000
Variable expenses		481,000		119,000		209,000		153,000
Contribution margin		445,000		146,000		195,000		104,000
Fixed expenses:
Depreciation		69,300		8,800		40,300		20,200
Liability insurance		43,500		20,100		7,700		15,700
Program administrators salaries		115,100		40,200		38,800		36,100
General administrative overhead*		185,200		53,000		80,800		51,400
Total fixed expenses		413,100		122,100		167,600		123,400
Net operating income (loss)	$	31,900	$	23,900	$	27,400	$	(19,400)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $31,900 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. 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?

1 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 seniors-home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow: 6.25 points Home Meals On House- Total Nursing Wheels keeping $ 926,000 $ 265,000 $ 404,000 $ 257,000 481,000 119,000 209,000 153,000 445,000 146,000 195,000 104,000 eBook Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) 69,300 8,800 40,300 20,200 43,500 20,100 7,700 15,700 115,100 40,200 38,800 36,100 185,200 53,000 80,800 51,400 413,100 122,100 167,600 123,400 $ 31,900 $ 23,900 $ 27,400 $(19,400) Print References *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $31,900 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. 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? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Reg 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Financial advantage Financial (disadvantage) Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Should the Housekeeping program be discontinued? Yes ONO Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B 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) Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? Yes O No