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	$	261,000	$	407,000	$	257,000
Variable expenses		474,000		110,000		210,000		154,000
Contribution margin		451,000		151,000		197,000		103,000
Fixed expenses:
Depreciation		69,400		8,800		40,400		20,200
Liability insurance		42,700		20,100		7,400		15,200
Program administrators salaries		115,200		40,800		38,100		36,300
General administrative overhead*		185,000		52,200		81,400		51,400
Total fixed expenses		412,300		121,900		167,300		123,100
Net operating income (loss)	$	38,700	$	29,100	$	29,700	$	(20,100)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $38,700 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?