Problem 11-19 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: Meals On House- keeping $931,000 $ 265,000 $407,000 259,000 153, 000 106,000 Home Total Nursing Wheels Revenues Variable expenses 478,000 120,000 205, 000 453,000 145,000 202,000 Contribution margin Fixed expenses: 41,000 7,700 38,300 81,400 413,800 122,500 168,400 Depreciation Liability insurance Program administrators' salaries General administrative overhead* 20,200 15,100 35,800 51,800 122,900 $ 39,200 22,500 33,600 (16,900) 69,800 43,100 114,700 186,200 8,600 20,300 40,600 53,000 Total fixed expenses Net operating income (loss) 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 $39,200 to be unsatisfactory; therefore, she is considering the possibility of discontinuing the housekeeping programm 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