omes 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	$ 929,000	$ 268,000	$ 406,000	$ 255,000
Variable expenses	477,000	119,000	203,000	155,000
Contribution margin	452,000	149,000	203,000	100,000
Fixed expenses:
Depreciation	70,600	9,000	40,700	20,900
Liability insurance	43,700	20,900	7,300	15,500
Program administrators salaries	115,100	41,000	38,600	35,500
General administrative overhead*	185,800	53,600	81,200	51,000
Total fixed expenses	415,200	124,500	167,800	122,900
Net operating income (loss)	$ 36,800	$ 24,500	$ 35,200	$ (22,900)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, considers last years net operating income of $36,800 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?