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	$ 925,000	$ 265,000	$ 409,000	$ 251,000
Variable expenses	457,000	113,000	191,000	153,000
Contribution margin	468,000	152,000	218,000	98,000
Fixed expenses:
Depreciation	70,100	8,700	41,000	20,400
Liability insurance	43,800	20,300	7,600	15,900
Program administrators salaries	114,400	40,900	38,100	35,400
General administrative overhead*	185,000	53,000	81,800	50,200
Total fixed expenses	413,300	122,900	168,500	121,900
Net operating income (loss)	$ 54,700	$ 29,100	$ 49,500	$ (23,900)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $54,700 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?