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 Housekeeping Revenues $ 921,000 $ 266,000 $ 404,000 $ 251,000 Variable expenses 462,000 111,000 194,000 157,000 Contribution margin 459,000 155,000 210,000 94,000 Fixed expenses: Depreciation 69,500 8,400 40,300 20,800 Liability insurance 42,800 20,200 7,100 15,500 Program administrators salaries 115,600 40,500 38,200 36,900 General administrative overhead* 184,200 53,200 80,800 50,200 Total fixed expenses 412,100 122,300 166,400 123,400 Net operating income (loss) $ 46,900 $ 32,700 $ 43,600 $ (29,400) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $46,900 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. 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?