Problem 11-19 (Algo) Dropping or Retaining a Segment [LO11-2] 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: Total $ 925,000 462,000 464,000 Home Nursing $ 263,000 113,000 150,000 Meals Or Wheels s 404,000 197,000 207,000 House- keeping $ 259,000 152,000 107,000 Revenues Variable expenses Contribution margin l'axed expenses: Depreciation Liability insurance Program administrators' salaries General administrative overhead Total fixed expenses Net operating income (2018) 69,900 44,000 115,400 185,200 413,500 $ 50,500 8,200 20,400 40,000 52,600 122,000 $ 28,000 40,400 7,700 39,000 80, 900 167,900 $ 39,100 20,300 15,900 35,600 51,800 123,600 $ (16,600 *Allocated on the basis of program revenues. The head administrator of Jackson County Senior Services, Judith Mlyama, considers last year's net operating income of $50,500 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 programi 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 18 Red 2A Req 28 Prev. 1 of 4 ! Next >