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: Home Meals On House- Total Nursing Wheels keeping $ 930,000 $ 269,000 $ 402,000 $ 259,000 471,000 113,000 198,000 160,000 459,000 156,000 204,000 9 9,000 Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (loss) 70,2008 ,400 43,700 20,700 115,500 40,400 186,000 53,800 415,400 123,300 $ 43,600 $ 32,700 40,900 7,200 38,500 80,400 167,000 $ 37,000 20,900 15,800 36,600 5 1,800 125,100 $(26,100) *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Miyama, considers last year's net operating income of $43,600 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? Total Home Nursing Meals On Wheels House- keeping Revenues Variable expenses Contribution margin Traceable fixed expenses: Depreciation 0 0 0 Liability insurance Program administrators' salaries 0 $ 0 Total traceable fixed expenses Program segment margins General administrative overhead Net operating income (loss) Do 10