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	$ 265,000	$ 406,000	$ 254,000
Variable expenses	471,000	114,000	199,000	158,000
Contribution margin	454,000	151,000	207,000	96,000
Fixed expenses:
Depreciation	69,300	8,400	40,600	20,300
Liability insurance	43,500	20,400	7,400	15,700
Program administrators salaries	114,400	40,500	38,300	35,600
General administrative overhead*	185,000	53,000	81,200	50,800
Total fixed expenses	412,200	122,300	167,500	122,400
Net operating income (loss)	$ 41,800	$ 28,700	$ 39,500	$ (26,400)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $41,800 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?

Complete this question by entering your answers in the tabs below. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Complete this question by entering your answers in the tabs below. Based on the financial advantage (disadvantage) of discontinuing the Housekeeping program calculated in requirement Req 1A, should the Housekeeping program be discontinued? Yes Complete this question by entering your answers in the tabs below. Prepare a properly formatted segmented income statement. Complete this question by entering your answers in the tabs below. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? Yes