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 $ 936,000 $ 268,000 $ 410,000 $ 258,000 Variable expenses 468,000 114,000 199,000 155,000 Contribution margin 468,000 154,000 211,000 103,000 Fixed expenses: Depreciation 69,600 8,200 40,600 20,800 Liability insurance 43,600 20,700 7,700 15,200 Program administrators salaries 115,000 40,400 38,300 36,300 General administrative overhead* 187,200 53,600 82,000 51,600 Total fixed expenses 415,400 122,900 168,600 123,900 Net operating income (loss) $ 52,600 $ 31,100 $ 42,400 $ (20,900) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $52,600 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. 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?

als 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)

• Req 1B