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 seniors home nursing, Meals on Wheels and housekeeping. Data on revenue and expenses for the past year follow:

Total. Homenursin Revenues. 934000 269000 variable expenses. 479000. 117000 contribution margin. 455000. 152000 fixed expenses depreciation. 69800. 8700 liability insurance. 43900. 20600 program administrators salaries 115500/40100 general administrative overhead 186800/53800 total fixed expenses. 416000/123200 net operating income loss. 39000/28800 Meals on Wheels: Revenues 409000, Variable expenses 205000, contribution margin 204000, depreciation 40900, liability insurance 7600, program administrators salaries 38800, general administrative overhead 81800, total fixed expenses 169100, net operating incomes 34900. House keeping: Revenues 256000, variable expenses 157000, contribution margin 99000, depreciation 20200, liability insurance 15700 program administrators salaries 36600, general administrative overhead 51200, total fixed expenses 123700 , net operating income loss ( 24700). The head administrator of Jackson County Senior Services, Judith Miyama considers last year s net operating income of 39000 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. 1. What is the financial advantage, disadvantage of discontinuing the Housekeeping program? 2. Prepare a properly formatted segmented income statement.