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	$ 918,000	$ 262,000	$ 400,000	$ 256,000
Variable expenses	473,000	117,000	200,000	156,000
Contribution margin	445,000	145,000	200,000	100,000
Fixed expenses:
Depreciation	68,900	8,200	40,500	20,200
Liability insurance	44,700	20,900	8,000	15,800
Program administrators salaries	116,200	40,700	38,700	36,800
General administrative overhead*	183,600	52,400	80,000	51,200
Total fixed expenses	413,400	122,200	167,200	124,000
Net operating income (loss)	$ 31,600	$ 22,800	$ 32,800	$ (24,000)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $31,600 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. 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. Prepare a properly formatted segmented income statement