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	$	927,000	$	267,000	$	409,000	$	251,000
Variable expenses		471,000		117,000		199,000		155,000
Contribution margin		456,000		150,000		210,000		96,000
Fixed expenses:
Depreciation		69,600		8,300		40,700		20,600
Liability insurance		43,300		21,000		7,200		15,100
Program administrators salaries		115,400		40,000		38,700		36,700
General administrative overhead*		185,400		53,400		81,800		50,200
Total fixed expenses		413,700		122,700		168,400		122,600
Net operating income (loss)	$	42,300	$	27,300	$	41,600	$	(26,600)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $42,300 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-b. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services?