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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

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 $ 915,000 $ 264,000 $ 401,000 $ 250,000
Variable expenses 461,000 115,000 193,000 153,000
Contribution margin 454,000 149,000 208,000 97,000
Fixed expenses:
Depreciation 70,300 9,000 40,600 20,700
Liability insurance 43,800 20,500 7,900 15,400
Program administrators salaries 114,400 40,200 39,000 35,200
General administrative overhead* 183,000 52,800 80,200 50,000
Total fixed expenses 411,500 122,500 167,700 121,300
Net operating income (loss) $ 42,500 $ 26,500 $ 40,300 $ (24,300)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $42,500 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?

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this is for number 3^

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)

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