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	$	265,000	$	405,000	$	257,000
Variable expenses		478,000		119,000		208,000		151,000
Contribution margin		449,000		146,000		197,000		106,000
Fixed expenses:
Depreciation		69,900		8,800		40,800		20,300
Liability insurance		44,200		20,800		7,900		15,500
Program administrators salaries		114,800		40,300		38,300		36,200
General administrative overhead*		185,400		53,000		81,000		51,400
Total fixed expenses		414,300		122,900		168,000		123,400
Net operating income (loss)	$	34,700	$	23,100	$	29,000	$	(17,400)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $34,700 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?

Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Complete this question by entering your answers in the tabs below. Req 1A Req 1A Req 1B Req 1B Req 2A Reg 28 Should the Housekeeping program be discontinued? OYes ONO Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Req 2B Prepare a properly formatted segmented income statement. T Total Home NursingMeals On House- keeping Wheels Revenues Variable expenses Contribution margin Traceable fixed expenses: Depreciation Liability insurance Program administrators' salaries Total traceable fixed expenses Program segment margins General administrative overhead Net operating income (loss) Complete this question by entering your answers in the tabs below. Req 1A Req1A Req 16 Req 1B Req ZA Req 2B Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services? OYes ONO