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 $939,000 $ 270,000 $410,000 $ 259,000 464,000 115,000 191,000 158,000 475,000 155,000 219,000 101,000 Revenues Variable expenses Contribution margin Fixed expenses Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (loss) 69,400 44,200 115,600 187,800 417,000 $ 58,000 8,300 40,500 20,600 20,500 7,900 15,800 40,700 30,400 36,500 54,000 82,000 51,800 123,500 168.800 124,700 500 $ 50,200 $(23,700) "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 $58,000 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? 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. Reg 1A Reg 2A Reg 1B Reg 28 What is the financial advantage (disadvantage) of discontinuing the Housekeeping program? Req 18> Financial advantage Financial (disadvantage) 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. Reg 1A Reg 1B Req 2A Reg 2B Should the Housekeeping program be discontinued? Yes O No Complete this question by entering your answers in the tabs below. Req 1A Reg 13 Req 2A Reg 28 Prepare a properly formatted segmented income statement. Total Home Nursing Meals On Wheels House- keeping 0 0 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) 0 0 0 0 0 0 $ 0 $ 0 $ 0 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 various services? Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2A 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
