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Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and
Jackson County Senior Services is a nonprofit organization providing three services to seniors who live in their own homes-home nursing, Meals on Wheels, and housekeeping. Revenue and expense data for the past year follow: Revenues Variable expenses Contribution margin Fixed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead* Total fixed expenses Net operating income (loss) "Allocated on the basis of program revenues. Total $ 923,000 469,000 Home Nursing $ 264,000 Meals on Wheels $405,000 Housekeeping $ 254,000 118,000 192,000 159,000 454,000 146,000 213,000 95,000 69,100 8,600 40,300 20,200 44,100 20,700 7,900 15,500 115,500 40,100 38,700 36,700 184,600 52,800 81,000 50,800 413,300 122,200 167,900 123,200 $ 40,700 $ 23,800 $ 45,100 $ (28,200) The head administrator of Jackson County Senior Services, Judith Miyama, is considering discontinuing the housekeeping program. The depreciation in housekeeping is for a small van 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 was 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? Complete this question by entering your answers in the tabs below.
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