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	$ 933,000	$ 264,000	$ 409,000	$ 260,000
Variable expenses	473,000	119,000	204,000	150,000
Contribution margin	460,000	145,000	205,000	110,000
Fixed expenses:
Depreciation	70,000	8,400	40,700	20,900
Liability insurance	42,800	20,300	7,200	15,300
Program administrators salaries	116,200	40,900	39,000	36,300
General administrative overhead*	186,600	52,800	81,800	52,000
Total fixed expenses	415,600	122,400	168,700	124,500
Net operating income (loss)	$ 44,400	$ 22,600	$ 36,300	$ (14,500)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $44,400 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?